Red Arrow, you luck bastard, where abouts in Brazil are you headed?
I've spent a fair bit of time living in Brazil in my youth so I'll try and answer some of your questions.
Cash machines, cash etc: would reccomend taking a few Reais to get started but apparently it's very hard to get from places in the UK nowadays. Don't bother with dollars, it's a myth that everyone accepts them. Generally, only Visa cards are guaranteed to work in places, in my experience. Lots of cash machines will say Maestro on them but won't actually let you take money out. Get an HSBC account is a good tip, tbh, because they're all over Brazil so if cash machine doesn't work, you can take money out over the counter. Generally, it's not such a problem in the big cities but it can be particularly hard to get cash far out in the sticks and, as Brazil is so huge, you'll find yourself frequently hundreds of miles away from civilisation so you end up doing the old mental juggling act of trying to weigh up the pros and cons of having enough cash against the dangers of carrying sums of money on you. All of which brings us to:
Pick pockets, etc: Actual pickpockets ("furtos") are not as common as you think but "asaltos" (muggings) are rife in some (but by no means all) areas. It's all about "DPL" (Dinheiro pro ladrao") Carry a little bit of cash (5, 10 Reais say) in your wallet and give it up straight away when asked. Keep all your important stuff (ie. cash card, passport, etc) in a sneaky pocket somewhere. Don't keep a bag around your neck or wast as that makes it far too obvious you're foreign and have stuff to rob. The most important things to bear in mind though, IMO, are, firstly, don't get obsessive about this stuff: if you're gonna get jacked, you're gonna get jacked. If someone who's armed gives you a good going over, you're probably going to lose your stuff, no matter how well hidden it is. Secondly, street crime, while rife in a way that seems utterly alien to people in the UK, is still not as bad as you'd think. You're not literally going to get jacked just for walking down the street and most parts of Brazil are relatively safe. I'd say to be extra careful in Rio, Salvador, Recife and some areas of Sao Paulo but the rest of the country, particularly the South and Centre West areas are relatively safe, provided you keep your wits about you. Learn a bit of the language so you're not completely unaware of what's going on around you. All big cities (and even some small towns) will have "favelas" or "morros", but I'd guess you probably know the score on that already. As a comparison, I've lived in Brazil for a little over two years and never been robbed but have been mugged twice in the UK so don't sweat it too much and let it ruin your trip but do stay sharp.
Wouldn't reccomend carrying an expensive digi cam around with you to be honest, get something you're not going to be too gutted about using as the number one places to lose stuff like that are long distances buses, etc, which you're probably going to use a lot.
Also, Brazilian people are ridiculously friendly, almost to the point of absurdity. The thing is to realise when to say no to things politely and not take advantage as Brazilians will often offer you stuff they can't really give and never tell you to your face if you're pissing them off. Ditto, for the birds: if you're blonde and blue eyed at all you're gonna love the North East but laying loads of local birds may not make you too popular with the local male population so keep it on a downlow and use a condom.
Be careful with drugs too. There's loads of lovely Brazilian bushweed ("maconha") about but it is very illegal and being foreign and getting caught with it can land you in a world of shit. As a general rule, I'd say leave that stuff for when you're out in the sticks and steer clear of it in the cities. Cocaine (sold in "papelzinhos") too, is abundant and cheap and, despite being heavily cut, is a whole lot stronger than what you've had in the UK but can lead you into the company of some shady people so take care. Ecstacy is hard to come by and expensive but generally very good quality.
Anyways, enjoy yourself, if you want some tips on places to visit or language let me know. Don't forget to bring me back some Kuat!