Tip number one: give Nicaragua more time than just the four days you have to kill between Guatemala and Costa Rica.
You can travel light in Nicaragua, but maybe not as light as you thought. Yes, it is always hot and humid, so you only need to pack for one climate, but it is so hot and humid that your favourite Chang t-shirt will be reeking mightily in a matter of days (at most). Of course you can do a furtive sink wash in your hostel, but your clothes won’t be drying any time soon. Every backpack in Nicaragua smells like mildew.
On the plus side if your special ‘booze from exotic country’ shirt does become unbearably foetid, you could always pick up a cheap Flor de CaÃ±a shirt to prove just how well travelled you are.
You’ll need a flashlight. When it rains the power goes out and every libidinous cane toad comes out to croak and shag in the mud. You really want to step into the middle of that? You’ll need a flashlight.
Everything closes early. Don’t expect the late starts of other Latin countries. Bigger towns have bars and clubs open til late, but a large chunk of Nica society shuts up shop as the sun is setting, before the bugs come out. Earlyish morning is the best time of day for getting things done. In the hottest part of the day Nicas observe the ritual of sitting in the shade and doing nothing.
Don’t expect street signs or intelligible addresses. In Managua directions are given in terms of blocks north/south/east/west of major landmarks. Every other city is small enough that it is hard to get truly lost. There’s almost always a volcano or lake or something to navigate by. If you do get genuinely stuck, there should always be an over-zealous taxi somewhere nearby.
If there is a traffic accident, local laws dictate that none of the vehicles involved can be moved until liability is officially established. So don’t get into a traffic accident unless you really want to see a lot of inept police officers doing as little as possible to redirect traffic while bellicose taxi drivers heap insults upon them. If the road you want to take is blocked, don’t be shy about improvising a way around. Any somewhat horizontal surface can be driven on (and will have less potholes than most Managuan streets.)
You can pay with dollars in more touristy places, but most places will struggle to give change for large bills. Don’t expect too much flexibility in prices if you’re paying with dollars. In all big towns there will be a knot of coyotes or money changers skulking around the major banks and tourist haunts; make sure you know your exchange rate before talking to these guys. They’re mostly honest enough, but can’t be blamed for gringo ignorance.
Not all ATMS accept international cards. Look for the red and white BAC machines; these are pretty reliable. They can’t be blamed for gringo ignorance either.
It really shouldn’t need rehashing, but go local. A lot of the tourist dollars that pass through Nicaragua end up as pocket money for some resident foreigner. Volcano boarding and 2×1 mojitos might sound like a blast, but your money won’t be reaching many Nicaraguan pockets. There is plenty of great accommodation/food/diversion operated by locals, most of it just off of the tourist strips. Be brave. You’ll need a flashlight.