my wife and I are planning a two week trip in Feb. 2013 to Morocco. I can use help with the following:
1- What are the must-see sites and cities to visit?
2- What are your feelings about staying in riads vs. hotels?
3- Are we making a mistake in visiting Morocco in Feb. due to the cold weather?
4- What are your favorite riads/hotels? ( preferably deluxe )
5- Are credit cards accepted? How about US dollars?
Many thanks

There are a lot of useful Morocco threads on Flyertalk. Consider reading through these:

Any recommendations for Morocco trip?
Five days in Morocco
Forget Marrakech...Tangier is now Morocco's hot spot
Morocco: Casablanca, Marrakech, etc.
Comments on Morocco itinerary
Morocco: Fez, Meknes accommodations

To answer your questions:
My must-see recommendations: Fez, Marrakech, Rabat, Volubilis, Chefchaouen, Tangier, the Sahara

Personally, I prefer riads in/close to the medina (aka the walled or "old" part of most cities) because I think it gives you the ability to immerse yourself better than you would in a hotel.

It depends on how much you like cold weather & where you're going! Remember that it's a big country with topographical variety. I wouldn't go camping in the Sahara in February--and you'll almost certainly see snow in the mountains--but you'll probably find weather in the 50s and 60s in many parts of the country.

I haven't stayed in a lot of places I'd consider "deluxe" so I'll refrain from commenting here.

The hotels I've stayed at generally accepted credit cards. I stayed at one riad that required payment in dollars, but I think that was the exception, not the rule. Only once when bargaining can I remember a store that offered to take dollars (though I generally don't offer to pay in dollars). I haven't used credit cards in most restaurants & shops, but that's generally because I'm trying to avoid credit card fees.