As with most countries I'd do a mix. Depending how long you are going for, I'd take about 200-300 in Euros (Post Office seems best bet - you may need to take your passport with you when you go to buy them). Ask for small demoninations, (5, 10, or 20 Euro notes - try to avoid taking 50 Euro notes and above, as many small shops and bars don't like them).
On a daily basis keep about 50 Euros in your wallet, plus another 50 in a safe, zipped pocket, (leave the rest in the hotel room safe).
For small day to day things use cash, i.e. for coffees, glass of wine etc. For meals use Visa or MasterCard. Make sure you have two credit (or debit) cards, one for use and one in the safe for emergency back-up.
Have the credit card details written down, contact phone numbers etc,and keep safely, (also worth photocopying your passport details, and your travel insurance details - keep originals in safe and carry copies with you).
Definitely don't bother with traveller's cheques. Almost no-one accepts them nowadays, and the few banks that do, are really hard to track down.
Haven't meant to throw scare tactics into this answer, but if you take precautions, I can almost guarantee that you will have a carefree holiday, and if something unpleasant does happen, you are covered and well protected.
Go, have a great time and enjoy your holiday.