The Mexican currency is the peso (MXN). In May 2012 was the value of € 1 equal to 17.2 pesos. For the current exchange rate you should look at www.oanda.com.
The banks at the airport can easily change U.S. Dollars cash but generally you should try and find an ATM machine as you will get a much rate. You can find ATM machines everywhere in Mexico during this trip, both with Visa and Maestro logos. We recommend you to also take cash in U.S. Dollars, preferably in different denominations (10, 20, 50 Dollar bills). The rates of the banks themselves sometimes differ a few percent. The major credit cards (especially Visa) are accepted in almost all the hotels and expensive restaurants and shops.
Euros are accepted in few places but only at a poor rate.