"Wir trinken Kaffee im Restaurant."

[Adam_Ludk]

How am I supposed to tell if they mean "the restaurant" or "a restaurant?

[Struck]

"im" is "in the", (in+dem). So in this case im is "in THE restaurant". If it was "a restaurant" they should say "in einem Restaurant".
http://en.wiktionary.org/wiki/im#Etymology

[wampyra]

"a" restaurant is usually when in German they say "one".
But in general I have no idea. Neither German nor English are my native tongs.

[n0waczek]

In big shortcut:
der, die, das - the
ein, eine, einen etc - a

[zacharles]

"Im" = "In + dem", aka "in the". If you've know any spanish, it is similar to "del".

[arowla]

This seems like a pretty advanced distinction to make at this stage ("im" = "in the" vs. "im" != "in a"). I don't think we covered this until at least the second semester of German in college.