Vietnam Currency

Answer

In Vietnam, the Dong (now with plasticy money and coins!-very exciting) and the Dollar are pretty much interchangeable. That is most places most of the time will accept either, from shoeshine boys to high class restaurants. It's probably best to carry a combination of both.
Dong, because it's in smaller denominations- much smaller denominations- and is therefore easier to haggle with. No one has a 50 cent coin! Another important reason is that sellers used to dealing with tourists are often prone to calling out the price in dollars, which may make things easier to understand but is really just a bit of psychological trickery. What just five dollars?!

Also take some dollar because The dong is in such ridiculously small denominations that you'll be carrying around bricks of the stuff after changing up a couple of hundred. 14 thousand Dong to the dollar.

The funny thing about changing money in Vietnam, apart from the sheer volume of notes you receive, is that there is a black market but for some reason the rates are better in the banks! I usually change on the black market (not dodgy people coming up to you outside banks) but in Gold shops-most Gold shops offer this service and although the rate is slightly lower than in the bank its not much and you save a lot of time and hassle. Mind you I suppose if you're really counting the pennies….

Have a good look at your Dong when you get some changed up as well. Nobody wants ripped, torn or dirty notes that won't be accepted so you may well find some when you make an exchange. They'll be changed no questions asked. Actually with the new plasticy money (you know the stuff I mean?) this is becoming less of a problem.