Have things changed then Canucksailor? Last year we changed Canadian Dollars at a bank in Cienfuegos and had no exchange penalty. We also exchanged Euros, again with no surcharge.
Using a Euro ATM card we had a surcharge of 10% deducted at source, but no standing charge.
I would also recommend The Rough Guide to Cuba
and especially Dervla Murphy's new book; Cuba
, The island that Dared. It was published in 2008, based on her journeys in 2007 and i think gives a very accurate description of what you are likely to find on your travels.