Not wanting to put all of my eggs in one basket money-wise when I went to Egypt this summer, I took cash, a pre-loaded AmEx card, AmEx travelers' checks, and credit cards (for ATM cash advances if necessary). All worked very well. If you go during Ahlan wa Sahlan, cash is probably the best. The ATM at the Mena House routinely runs out of cash, and the bank there was running out of small bills.
The only problem -- endemic in Egypt -- is maintaining a supply of small change.
