The official currency is the South African Rand (ZAR, or more commonly, R). One hundred cents comprise a rand. Minor coin denominations are 1, 2, 5, 10, 20, and 50 cents. Larger denominations are R1, R2 and R5. Notes come in 10, 20, 50, 100 and 200 rand variants. In recent years, the rand has seen something of a resurgence against the dollar and has until recently remained range-bound at R6 to the dollar (US). As of August 2010 one dollar will cost you around R7.

Cost of living is relatively cheap and Johannesburg is rated as one of the cheapest major cities in the world; a quarter of that of a city such as Tokyo, for instance. Bread and 2L milk costs about R20 at a supermarket such as Pick n Pay or Woolworths, corner shops will charge about R25 for the same.Saying the US$ is about R7, this will come to just under $3 for a loaf of bread and 2L of milk.
Although considered a third-world country, South Africa offers first-world luxury and amenities at a fraction of the cost available in other parts of the world.

Added 11/12/05 by Keith - It is the big stores like Pick and Pay that have the buying power, and who offer the low prices, and anyone coming to SA as an expat would be advised to shop in the large chain stores. The local convenience stores have longer hours than the chains, and are quite literally convenient to use when you run out of something, but in terms of price, they are a good deal more expensive, and in terms of range, they are limited.

Added August 2010: Thanks to M-L for the updated bread and milk prices here.