They eat copeopods....and lots of them. Mine will sometimes accidentilly take in some hair algea but they always spit it back out their gills. Their hunters like mandarins. They will also sift through the top layer of your sand bed searching for worms or whatever little critters they can find.
As far as their food is concerned, they seem to be pretty size specific, only eating the smallest critters they can find.
Mine are very peaceful towards each other and all tank mates, they dont spook easily like alot of other gobies. Infact mine dont even seem to be bothered when i have my hands in the tank cleaning or rearanging things, they just go about their business. If you can feed one...get one!