I believe the only things we're outright prohibited to do while wearing letters are drink alcohol and use illegal drugs. I don't know if there's a policy about smoking, as I don't smoke.
My local had a stricter policy: We were forbidden to wear letters anywhere alcohol was being served, whether we were drinking or not. That meant, among other things, that we could not wear letters or our badges at any restaurant with a liquor license.
We don't have any hard-and-fast rules about looking presentable - the unwritten rule is to use your common sense. It's ok to wear letters if you're not wearing makeup, if you are wearing jeans, or if you're exercising (i.e. doing something positive for your health), but not if you haven't showered in a couple of days or if you're running around with wet hair, ripped jeans, etc.
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AEΦ ... Multa Corda, Una Causa ... Celebrating Over 100 Years of Sisterhood
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