I am familiar with the concept of nice crispy clean $US bills for the Visa, but will they take Rupiah? I've still got quite a bit from previous trips.
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Indonesia VISA on arrival
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I just checked the latest Lonely Planet. It says, "The cost is $25...you can pay by credit card or major currency..." My guess is they want the hard currencies. Save the rupiah for Bintang

Phil
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You can pay with RP or credit card but exchange rate very high, so better pay with USD (prepare for small note).
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They are getting better on accepting less then pristine dollars, but the last time I went through (Bali - Sep. '08) I only had a $100. They gave my change back in Rp. at a terrible rate. So I would say have exactly $25. I have not heard of them taking credit cards, and I would be leary about using one at an Indo airport.
Also, in Oct. '05 in Manado there was a couple ahead of me that only had Euro and they would not accept it.
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Agree with expat diver, make sure you have the dollars available in the exact amount. Whenever I was going in and out of Medan on visa runs the dollars were always the easiest way.
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dont forget either that your day of arrival counts towards the number of days you can use you VOA. This can be especially troubling if you go for a 7 day visa, say for example you arrive on a saturday then your visa will only be valid till the friday not the saturday, even if you just arrive at 11pm on a saturday. just been through that, it's no hassle you just pay extra on the way out but still can be a bit surprising.
/paul