I was in Mexico just last weekend and I can assure you that the USD is accepted at many businesses there. You can sometimes even get a better price/exchange rate when paying in USD.
It all comes down to the merchant really. Even if there is a law that says you cannot accept foreign currencies, it doesnt even matter, as a merchant you can say okay, give me your pounds, or whatever, and you store the guy's pounds and then exchange them for your local currency. As long as you dont convert regularly it wil not raise any alarms and you can get away with it. Of course this only works with cash transactions.