In reply to Ben@Sheffield:
In Nov last year I bought new BD Turbo Express ice crews for US$42 each. There are two stores in particular, just on the edge of Thamel, opposite Fire & Ice Pizza that have lots of new gear, genuine, at prices same or lower than in the west. One of those shops is referred to as "the Mountain Hardwear" shop as it has a big MH sticker in the window and has lots of MH gear. It's a great place to buy BD and Petzl hardware. A few doors down is another similar store with a big Millet sticker in the window. The North Face have a genuine store there (and in Pokhara) but their selection is crap. Mostly their prices are fairly set, no haggling.
The fake gear is woefully obvious nowadays, getting conned is not really an issue. That said, some of the stuff is perfectly fine for what people will do with it - trekking, or trekking peaks. Some of the soft-shell pants and jackets are particularly good value, makes you realise how overpriced the genuine brand-name western stuff is. Just variation on nylon. The waterproof jackets however may not be as reliable.
The down gear is OK, not as warm or light as a nice new 850 Mountain Equipment or Rab, but again fine for how many will use it. It got a good light down jacket (fake Mammut) for $30 a few years ago and a decent light sleeping bag (fake Marmot) for $50. Try on each garment as the QC is not good and sizes/fit can vary significantly.
There is also a very nice big Sherpa (the brand, not the people) shop just down past the old palace. Prices and quality are at the level of prices in the west but they have the full range of their garments.