There are money changers where you might get a few pennies better exchange rate but usually I use ATMs. Scotiabank is a network that has no ATM fee and a highish withdrawal limit. GlobalNet and BCP are the worst (high fees and for GlobalNet a low limit).

The airport has the worst rates. Usually I just get a small starter amount at the Lima airport and then head for an ATM. Try to use the ones insude a bank if possible.

We tried once to get money exchanged at a hotel - no luck.

Your best bet is ATMs or in the bank itself. The ATMs will give you larger bills, so usually we would get money out then walk into the bank and ask for small bills.

mlgb has it right - BCP has very high fees. Scotiabank was the best but we couldn't always find an ATM or branch for them.

We took a good amount of US dollars and converted it at the airport to pay for the taxi and the first couple hotels. Remember that you get hit with the exchange fee and foreign transaction fee each time you use an ATM. We would take out larger amounts of money to avoid having to go back the next day.

To add on to what shutterbug said, many hotels and tour companies accept USD cash. Sometimes small hotels add a credit card surcharge or don't accept CC.

It is getting easier to find ATMs and to pay with credit cards, plus in a pinch you can usually pay in USD cash. I find that I can get by on about 100 nuevo soles per person per day for incidental meals, taxis, etc.
That doesn't include local admissions fees, boleto turistico, etc.

This is getting boring.

Thanks everybody!