Although originally it was supposed to be a cash-only, envelope method challenge we haven't really stuck to that part of it. We have been, so far, successful at sticking to the $25 limit. Actually, last week were just under $20 - we had a lot of left over odds and ends to clear out of the fridge. We do a Friday to Friday week and this week is looking good too; we've spent $10 so far this week.
The budget covers just groceries, not eating out, alcohol or paper goods for just the two of us and the real challenge will be maintaining it long term instead of eating our pantry empty and having an expensive restocking week. Our meals have been pretty typical for us, healthy, mostly vegetarian with lots of produce and I think we're just getting back into the groove of eating everything we buy. We've also been grilling a lot lately which has been nice.
Once we have our usual grocery budget back as habit we'll probably move on to look at eating out (though we haven't been doing a lot of this) or alcohol (spending more than usual here) expenses. We'll see how it goes.
What do you spend on groceries each week or month?
Update: I wrote about the tactics we've been using to meet our $25 budget for more how-to information.