This story has been getting quite a lot of attention. On Sep. 6, 2003 a man paid for $150 in groceries at a Food Lion in Roanoke Rapids, North Carolina with a phony $200 bill bearing George W. Bush's portrait. The bill showed a white house with signs on its lawn reading 'we like ice cream' and 'USA deserves a tax cut.' The cashier accepted the bill and gave $50 change. The Smoking Gun was able to actually get a picture of the $200 bill used in the transaction.
What most people don't remember is that this scam is hardly new. Two years ago, on January 28, 2001 a drive-thru customer at a Danville, Kentucky Dairy Queen paid for his $2.12 purchase with $200. That $200 was handed to the cashier in the form of a single $200 bill bearing on the front the likeness of George Bush and a treasury seal marked "The right to bear arms." The back of the bill showed an oil well and the White House lawn decorated with signs. The signs read "U.S. deserves a tax cut," "No more scandals," and "We like broccoli." The cashier accepted the bill and gave the customer $197.88 in change. The customer quickly drove off. Speaking later in her defense, the cashier explained that she had believed the $200 bill to be legitimate because it was green, just like real money.
Update: A visitor pointed out that the link to the Smoking Gun (now removed) no longer goes to the Bush Bills story. In fact, I couldn't find the story on their site any more [wait... here it is in their archive section], but luckily the picture of the Bush Bills was stored in Google's cache. Here it is. And one more thing. I realized that the bills used in the recent incident (Sep. 6, 2003) sound identical to the ones used in the Jan. 28, 2001 incident. Actually, they don't just sound identical, they are identical. So the two events must be related. I wonder if the police realize there was an earlier incident in a different state?