Hong Kong Currency
Hong Kong currency is the dollar and there are notes of HK$10, HK$20, HK$50, HK$100, HK$500, and HK$1,000, though the 10 dollar note is scheduled to be phased out. There are also 1, 2, 5 and 10 dollar coins. The exchange rate has been pegged to the U.S. dollar at just about HK$7.75 per US dollar for years and is one of the most stable currencies in the region. When Thailand, and ultimately Malaysia, Indonesia and other Asian countries saw the value of their currency drop precipitously during the currency crises which began in 1997, Hong Kong stayed firmly tied to the U.S. dollar and remains strong today. There is no limit to the amount of Hong Kong dollars you may bring into or take out of Hong Kong.
The official exchange rate only moves slightly from ~US$1=HK$7.754. You can change money in Hong Kong at the following places, with varying levels of rates and commissions. Keep in mind that the exchange rate for traveler's checks is almost always better than that for cash.
Airport: Rates are a bit higher here, so change only what you need to get into the city as you'll get a better rate at a bank.
Bank: The best rates are at the banks, but some are better than others. Often, it depends on how much you are changing as some charge commissions (with less favorable rates) and others don't, but may have an attractive exchange rate. Shop and compare, as with everything in Hong Kong.
Hotel: The rates at hotels are not as good as at the banks, but they do have better hours.
ATM: That's right, at an Automated Teller Machine. There are ATM's all over Hong Kong (Star Ferry piers, large banks, major MTR stations, the Airport, etc.) and their exchange rates are better than the banks. What you have to watch out for is the commission your credit card company charges you. This can be a great way to get foreign currency anywhere if the amount is large enough to make the charges economical. It's also a great way for your credit card company to make a few extra dollars. It is a good idea to know before you go what your credit card company charges you for this service.
Money Changers: Visit these teeming entrepreneurs only as a last resort. If you see a very good rate advertised, then watch out for a commission charge. Again, use them only if you have to.
Credit Cards & Travelers Checks
All major credit cards are accepted widely in Hong Kong. Some smaller merchants may offer a "discount" for cash, meaning they've already incorporated the fee they'd have to pay the credit card company into their selling price. If you are bargaining with someone, make sure they (and you) know whether you are paying with a credit card or with cash.
You will get the best exchange rates by exchanging traveler's checks at a bank, with less commission for a larger denomination. If you are changing AMEX traveler's checks at an AMEX office, there is no commission. There are two AMEX offices in Hong Kong:
American Express: Hong Kong Island
Henley Building, 5 Queen's Road, Central District
American Express: Kowloon
25 Kimberley Road, Tsim Sha Tsui (just off Nathan Road)