I was in BA in February so this is a little late in sharing but someone may find it useful (esp. Canadians!).
I had read that US dollars were preferred in Argentina and was prepared, however, I wasn't comfortable carrying a lot of cash in person so decided on $800USD as a comfortable amount and would use credit cards and ATM as I went along. I wasn't afraid of pickpockets but was more afraid of actually getting robbed while exchanging money or being given counterfeit since I thought only specific places on the street would be able to exchange money and it sounded shady to me.
My research did not prepare me for the money problems I would face in BA. Essentially, the bed & breakfast owner in BA put it best when he stated that the only ones who rob you will be the banks in Argentina, not people on the street.
I wish I had brought more cash for my trip. The exchange rate is so much better with US cash in hand. And there is no need to go to any particular money exchange on the black market - it's pretty much everywhere. I was able to pay in USD at the travel agency, B&B, hotel, hostel, restaurants, shops - everywhere! And I got a much better exchange rate than I did at the ATM when withdrawing money.
Here is the kicker with the ATM machines, at least for me with a Canadian bank - the limit per withdrawal is about $200USD when I withdrew for pesos (I tried in different cities in Argentina and it was always $200) and my fee per transaction was $20! I wouldn't mind paying that much if I could get more per withdraw but it was ridiculous to pay $20 fee per $200 - and this doesn't even address the terrible exchange rate that the ATM gives me.
This isn't a limit set by my bank but apparently by banks in Argentina - this is what I was told my my B&B owner. Apparently there are all kinds of bank regulations and limits. Even as a tourist, you can't get a bank to exchange extra pesos back into foreign currency and impossible for locals to get foreign currency so it's very highly valued. Everyone is clamouring for USD so don't worry about going to a particular street to exchange it, as I have read on Tripadvisor. You can use US cash everywhere in Argentina and get a very favourable rate outside of banks and ATMs.
However, do take precautions and use a money belt if you decide to carry cash. We didn't get robbed but my friend was pickpocketed - lost wallet and camera from her purse during a night out in BA and we didn't even realize it because she had her purse swung on her back (we were together the whole time and I didn't notice anything suspicious either) - luckily, most of her money was in her money belt and not in her wallet. I had my money belt and carried my purse in the front at all times and had no problems. Especially in bars and restaurants, do NOT put your purse on chairs or table tops - always in front of your body or on lap.
In summary, carrying US cash is the best option (as not all places had creditcard options) but definitely use a money belt and don't keep it all in your wallet or purse. We had no problems with $20 & $50 US bills at shops and paying for accommodations at hostels and B&Bs. The merchants will give you change in pesos and always at a better rate than the banks. We like to eat and just used credit cards when we splurged on expensive meals.Edited: 28 August 2013, 21:31