Every Friday and Saturday night you can have dinner and listen or dance on live Greek "rebetiko" music. It's in the Taverna Agrilia on the beach road, Sof Venizelou 63, which is close to Porto Rethymno Hotel.
There is more life music and now in the old town at the well known restaurant of Symposium, very close to the Neratze Minaret and the Odeon. Every Friday and Saturday. Symposium is famous for its Cretan Kitchen.