What can't you use your points on good question.
I know the new mexican type of restaurant in january of 2011 was not taking the rewards card, they where not setup for it yet.
I honestly don't know who doesn't take the card, there is a list somewhere online of who take it and almost everywhere takes it.
Earl of sandwich, ghirardelli chocolate, prezetal place, etc. I think at one time of another I have bought something at almost every place in the downtown and never had an issue.
I tend though to use it for the big ticket items like the hotel bill or eating at the park.