This is the best piece of news I heard in some time from Nepal. Was just casually chatting up my good friend from the BBC in Kathmandu when I heard that the situation if getting better, as an accord has been signed. Various news report that life is coming back to normal in the Terai, which is the southern plains in Nepal.
From NepalNews.com :- Cabinet endorses the govt-UDMF deal: victory rallies in most terai districts
From BBC - Nepalese group set to end strike
Hopefully, this will mean that the prices of essential items will normalise again, and fuel will be available. Kathmandu has been crippled for a few months now.
Travel advice: You can still go to Kathmandu, this is a country in the making since April 2006. Its exciting, but be armed with local knowledge. The hassle factor is still high. Demonstrations and strikes can flare up anytime. You are not in danger, but avoid these places due to the inconvenience that it will cause... Definitely. You are better off in the mountains..