The Himalayas sit like a wall on the other side of the valley, so as the monsoon rains roll in (as they are at the moment) the mountains are so high they essentially wring all the water out against them. So one side is a lush tropical valley, while on the other is a desert, the Tibetan plateau. The difference was quite striking to see on the flight in.
I'm staying in a tourist ghetto called Thamel. The first hippie hikers congregated in an area nearby which is still known locally as Freak Street. The streets are narrow and crammed full of people dodging rickshaws, bicycles, motorbikes and taxis. Tourist agencies, restaurants, souvenir shops, internet cafes, etc loom over the street.