Regarding credit cards vs. cash: my husband and I used cash. Smaller shops may not take credit cards. Plus, when I called my bank to give them a travel notification for our credit cards, they recommended we use cash to prevent identity theft.
I think it's always good to have money in a variety of forms (cash, credit card, traveller's checks) just in case, but that's just my opinion.

siena1 - that's what we did too.

I was afraid we would have trouble with our credit cards, so we carried a combination of $$, yen, travelers checks (which were easily exchanged at a bank in Kyoto - and the rate was good too), and credit cards.
Lot of smaller shops only took yen, as did many restaurants. We did manage to get money from a Post Office ATM.
I know others like to travel with plastic, but I felt more comfortable with several options.
Our guest house in Kyoto - we stayed 5 nights, 3 people - only took cash (we knew this before we left home.)
Our hotel in Saijo would take a credit card, but they greatly preferred cash too.
okoshi2002 - be sure to post a trip report. Have a great time.