Just got back from DPS, including a few nights at the IC
ATM is fine, but rates and fees are pretty horrendous, so DPS is one of the few places I exchange cash. GBP, EUR, USD all fine. Some massage places prefer USD, so maybe keep a few loose notes
Change a little at the airport (marginally less favourable rate), then go to one of the authorised money changers on the street outside the IC. I didn't hear of anyone being diddled, but it pays to keep a watchful eye and count your rupiahs scrupulously before you leave the money changer. Simples