The two currencies in circulation in Cuba. On the left is Moneda Nacional or Pesos Cubanos, which the locals get paid in and use to buy basic goods and services. On the right are Pesos Convertibles or Dólares, tourist money, though increasingly the lucky Cubans who make a living off tourists (such as the people who run the casas particulares I stayed in) have a steady income denominated in these, and so can procure a wider selection of quality goods and entertainment.
The exchange rate is about 25 Cuban pesos to 1 convertible peso, which is about 1 euro! Whilst a different range of goods is available in each currency, it became apparent sometime during my week there that going for cheap things sold in Cuban pesos was the key to making my money go further, in what can be a very expensive country for the budget traveller. For instance, a (sort of) ham and cheese sandwich will cost 10 Cuban pesos on the street in Habana, whilst touristy places will sell a slightly higher-quality version for between 2 and 3 convertible pesos, about 5 times more!
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