Use travelers' checks at hotels & dive shops etc, but don't think of using them with street traders or for small purchases in grocery shops, etc. Any more than you would back home. I can pretty well guarantee that most street traders would NOT accept travelers' checks, whether for $20 or more..
As for other businesses, P1 is absolutely right. There is considerable admin associated with accepting Travelers' checks, and $100s are way more welcome than $20s. He just has his own inimitable style in presenting himself!
Note - Amex TCs will be accepted as readily as most other $ TCs, but don't bring any other currency's TCs. And the Amex credit card is NOT universally accepted, whereas Visa and Master (virtually) are.