The official Russian currency is Rubles (rub`li). One ruble ( o`din rubl') consists of 100 kopeek (1 kopeika - od`na (one) ko`peika). It's not legal to use US dollars or Euro for transactions in Russia. You will have to pay with rubles in most cases. Generally, foreign currencies are usually used for "under-the-table" transactions, which are not going to be declared. So, you won't be able to use US dollars, Euro, or any other currency in a shop, cafe, or to pay to a service provider, for example.          But many Russians still have their savings in US dollars or Euro, partly because of the old tradition, partly because many get their salaries in foreign currencies, partly because they still don't trust in Ruble's stability, so you'll often find that you'll be able to pay to a private person with US dollars or Euro (depending which currency this person trusts more).

         It's better to have some cash ($200-300 US - just enough for initial expenses) when you come to Russia and the rest in the traveller's cheques and cards. If you're going to small towns or to the countryside, it's better to take cash only, because you might have problems with cashing the cards or travellers' cheques. Cash is used much more often than the cards.
          Travellers' Cheques is probably the most secure way of keeping your money: you are the only one who can cash the cheques and if lost they can be reissued - just write down the numbers beforehand and keep them separate from the cheques. The problem is that in Russia you can refund them only in banks, which are open mostly from 9 until 17. The banks charge commission for refunding the cheques (about 2-3%) and for buying the cheques - usually 1%.
          The most widely accepted cheques in Russia are American Express and more rare - Thomas Cook. Please, note, that you cannot pay with travellers cheques in Russia, you can only withdraw money from them in banks. Also, the recent customs regulations make it necessary to declare the cheques when you enter Russia.

           Cards

         There're many cash machines in St. Petersburg  and Moscow, and a lot of shops and restaurants accept cards in the big cities. However, as soon as you go to smaller towns, you'll find it hard to use your credit card.
If you don't know where to look for an ATM, go to any big and expensive hotel. However, it's better if you withdraw your money in the cash machine, which is at some bank's office, in that case if your card gets swallowed you'll deal with the problem faster.
Usually banks charge 0 to 1% commission if you withdraw money with the card of the other (foreign) bank, but your bank - the issuer of the card - will take from $2 to $5 US for this operation. In most of the cases you'll receive rubles; some ATMs dispense rubles as well.
Visa, MasterCard are accepted almost in any ATM, Visa Electron and Cirrus / Maestro - more rarely, and AMEX and Diners Club owners might have problems cashing the cards.
           It's good to write down beforehand the numbers of all the traveler's cheques and cards you have with the emergency number, so that in case something is stolen you can block it. Anyway, not to get in a big trouble try to store some amounts in cash, in cheques and cards and put them all in different places, so that if something is stolen you still have a backup.
If everything you had is stolen you can ask somebody to make a money transfer for you (through Western Union, for example) to the bank you choose. The most widespread international system of money transfer in Russia is Western Union. The transfer can be made through almost any bank and it takes only 20 minutes. Otherwise you can go to your country's embassy and may be they will help you.
           Take US dollars or Euros with you. It is very easy to exchange money in the major cities; Moscow and St. Petersburg, just keep your eyes open for the best exchange rates. Avoid the airport exchange kiosks and never change money in the street, because you might get swindled.