Turkish Money

The unit of Turkish money is the Turkish Lira (Türk Lirası, TL or TRL). In 2009, new banknotes were introduced. More...
From 2005 through 2008, Turkey's currency was called the New Turkish Lira (Yeni Türk Lirası, YTL or TRY). As of January 1, 2009, the "New" (Yeni) has been dropped. The currency is again simply the Turkish Lira.
Here's the current exchange rate for the Turkish Lira. It's best to wait until you get to Turkey to exchange money for Turkish Liras. Exchange rates outside of Turkey are usually not as good as those inside Turkey.
The Turkish Lira is divided into 100 kuruş (kurush; that's koo-ROOSH). Here's how the 2009-series notes/bills look.
Although you can sometimes use foreign currencies (euros are best, US dollars are good, UK pounds sterling are accepted in some places) for larger transactions, and using non-Turkish currency is legal, you will want to use TL most of the time.
The easiest way to get cash liras is to stick your home bank card or credit card into a Turkish ATM (bancomat/cashpoint, cash machine). Travelers' checks are a much less efficient way.
You can exchange foreign-currency cash at a Currency Exchange Office (Döviz Bürosu). 
 
The best currencies to carry for changing to TL are, again, euros, US dollars, and UK pounds.
Many people in Turkey will not accept large bills/notes for small payments, so it's good to juggle your TL cash-on-hand so that you always have some smaller amounts. Get in the habit of paying with bills/notes that are about equal to twice the amount you're paying (so pay for a TL23 meal with a TL50 note, which gives you TL27 in change). If you give notes that are three times or more than the price, you're liable to get a dirty look and a request for smaller notes.
Old pre-2005 Turkish Lira notes and coins and 2005 to 2008 New Turkish Liras have been withdrawn from circulation. TL1.00 is equal to (old, pre-2005) TL1,000,000 and YTL1.00. In other words, a million old liras equals one new lira, but you should not accept old pre-2005 liras or 2005 to 2008 New Turkish Liras! More...
A century ago, one Ottoman Turkish lira was worth US$5 (and that $5 was worth about US$100 in today's dollars).