Bike licence

Yes more or less but if you are stopped then it will take a little more hassle and bargaining power with the police.

As long as you are wearing a helmet, the lights are on and you arent riding like a tourist then you will more than likely be ignored. Make sure the STNK for the bike is with you as well.

I have always hired bikes in Bali but have the luxury of a SIM C so its fully legal for me.

I'm unsure so this needs to be checked ..

I seem to think there's a time limit for using an international licence and it's a good idea to get a local SIM C if you intend to be here for any time for the reasons noted in Luke's post.

Perhaps Luke could confirm the next point - I understand foreigners now now only get a licence from their local area's main police driving licence department rather than just any office that happens to be nearest to you.
Is that correct?

The process of getting a SIM c for an expat us fairly simple but getting more complicated all the time. For Jakarta you have to go to a main licencing place if you are an expat. An agent can still be sought if you want to fasttrack otherwise it can take most of the day.

But if you are not a kitas holder then it can't happen.

The last time I renewed I needed a letter from my street and local area heads, a copy of kitas, passport and salary letter from employer.

The last one I did required:
KITAP
Passport
KTP OA (WNA)
Letter from RW to say I lived there.
STM (police report)
Old licence
Medical check up from a local doctor (I understand the driving licence centres all have their own now)

and photocopies of the lot.

Cash - The old problems concerning corruption have been pretty much wiped out now and you'll find a bank mini branch at licence centres where you pay and get a receipt to show you've done so.
You can only pay when you have all the other bits sorted out.

I was told the new rules (since the anti graft purge) requires foreigners to go to the head office, this now confirmed by Luke.
That's in Jakarta and the surrounding areas, but rules in other areas of the country might well be different.