Hi, you are going to have a fab time in Nepal! The simple answer is that either is fine: if you are English, just take sterling: it's not worth changing to dollars and then changing again. You can change the money either in a bank (there are loads within 5 mins walk of the Royal Singhi) or with any of the money changers in Thamel - this is now legal and safe. There are also plenty of ATMs in Kathmandu that are very reliable, the only thing to watch is that the limit for withdrawals each time is 10,000 rupees (c£93 as of the last time I went in March this year): you can do multiple withdrawals at the same time, however you get hit with multiple bank fees from your own bank. You can also change money at the airport (not worth doing unless you are paying for your own taxi) or in the Royal Singhi (not a great rate but convenient). Change your money before you go to Lukla. You can change money in Lukla, including at the lodge, but you shouldn't bank on it! The Irish bar in Lukla takes cards so you can always pay for drinks at the end of your trip that way. Have fun!!!
Having been for the last four years I personally would recomend dollars especially on the Everest trail & Ama Dablam. Enjoy its fabulous. The locals prefer dollars. We did the Everest trail last year to Ama Dablam and it was brilliant.
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