I've always liked both looks, but I've never compared them side-by-side. I gotta say, the mid century modern look wins for me by a landslide. I do like the idea of merging the two styles, though. I think the best way to do that is to either a) do the diner thing but pare it way down for a cleaner look (maybe find a formica/chrome table but don't go overboard w/the 50's stools and the 50's clock and all the other tchotchkes that go along with that era); or b) keep it clean and simple for the mid century modern look (and include a statement piece like a table to drive the point home), but then throw in hints of the diner thing with big checkered floors, but maybe in a more muted color palette.

I totally agree. we prefer a cleaner look than the top photo but maybe a light color + white checkered floor would work. not sure what we'll end up doing for a table--I remember someone making their own tulip table using an existing base. It might just be whatever the best deal we can find at an estate sale. I'm not opposed to a formica table!