The currency used in the Ukraine is the almost unpronounceable Hryvnia, and credit cards are all but useless apart from in the banks in the capital city Kiev, where you can get a cash advance on them for around 4% commission.
The cost of living remains low in the country, although it is rising, and away from the tourist areas, there are cafes where you can get a meal for two people including wine for less than £5, although expect to pay at least triple that in the nicer restaurants.
The US dollar represents power in the country, and carrying some with you guarantees a better exchange rate that you would get from Sterling, and travellers cheques. although accepting Hard Currency like the Dollar is technically illegal in Ukraine, the restaurateurs welcome it, and give a better rate than you will find almost anywhere else.
Tipping is expected by waiters, bar tenders and taxi drivers, give them 5-10% of the total and they'll go away happy.