In this economy? Are they out of their minds?
Perhaps not. The company is marginally profitable, and its total addressable market is still largely untapped. The OpenTable reservation system is not in place at all restaurants that could benefit from it, especially those outside the United States. From a product perspective, since the system does increase the number of chairs filled in a restaurant, it's a good and proven investment for a restaurant to make.
However, this is no magic bullet to save the dining industry. Restaurant revenues overall will decline during the recession, as people strive to save money on all discretionary expenses such as dining out. Restaurants will go out of business and some will no doubt be OpenTable customers. So without a stepped-up sales push, which IPO funds could provide, OpenTable's growth would be destined to slow this year.
OpenTable benefits from a strong network effect: The more restaurants that use it, the more valuable it becomes to consumers, and thus the more potentially valuable it becomes to restaurants not yet using it. That's assuming there's no open standard for online reservations, but I haven't seen any drive toward that, and I wouldn't expect the restaurant industry to devote resources to it as long as OpenTable treats its customers well.
One could argue that investors are wary of the public market now, for good reason, and one might thus think that any company making a public offering now will generate much less cash by doing so that it would during a bull market. That is not necessarily true. As one of the few companies are currently able or willing to go public, OpenTable will get a lot of investor attention.
There's a financial analysis of OpenTable on TechCrunch: OpenTable Files for IPO, Reveals Finances.