Kathmandu has a rich cultural history which is exemplified by its four World Heritage sights - The Durbar Square and the Bodhnath, Swayambhunath and Pashupatinath temple complexes.
The Patan Durbar Square has an amazing set of temples
Bhaktapur is the smallest and least altered of the three cities in the Kathmandu Valley. In recent years, the German funded Bhaktapur Development Project has resulted in sympathetic modern development and the centre of the old city is now traffic free. Despite being only 10km from Kathmandu, Bhaktapur has retained its medieval atmosphere and provides a glimpse of what Kathmandu has lost. Foreign visitors have to pay a five dollar entrance fee to help with the upkeep of the buildings and there are many English speaking guides who will be happy to show you around the city for around 100rp, well worth it. There are three main squares to visit - The Durbar with its many temples, the Taumadhi Square with the amazing five storey Nyatapotala Temple and the Dattatraya Square. Don't miss the intricately carved Peacock Window on the Puljari Math, just off the South Eastern corner of the Dattatraya Square.
On my first visit to Nepal in 1992, Bhaktapur was being used as a film set for Bertolucci's Little Buddha. Some of the temples were festooned with huge sways of golden material but unfortunately the Durbar Square was cordoned off, not so in 1999 when at last I was able to view the Durbar Square in its entirety.