Get an Oystercard. If you just put cash credit on it, the amount deducted from your credit each day is capped at 50p less than the cost of a One Day Travelcard which would cover the same journeys
If, after checking out the price differences, you want to buy a Travelcard (for more than one day), you can have the Travelcard credited onto your Oystercard. For full details of how the fares system works, download the Transport for London fares guide, here:
http://www.tfl.gov.uk/assets/downloads/TfL-Far es-Jan-2007(1).pdf
Just one additional point: If you're thinking of taking a river trip (which is definitely the best way to see many of London's historic sites), many river services give you a third off the normal ticket price if you present a Travelcard or an Oystercard charged with a Travelcard. (You don't get the discount with an Oystercard which only has cash credit on it). I recommend taking the short trip between Tower Pier and Westminster Pier.
Chris