The currency in Laos is the Kip (LAK) which comes in 5,000, 2,000, 1,000, 500, 100 and 50 Kip denominations. In most travel destinations, with the exception of the remote or mountainous areas, Thai Bahts and US Dollars are also accepted widely. For items of higher prices such as room rates at luxury hotels, food at first class restaurants, deluxe tour packages...the prices are normally quoted in US Dollars.
You can convert US Dollars or Thai Baht into the local currency as much as possible upon entry. But having some cash in US Dollars, some in Thai Baht and some in Lao Kip is recommended. The more expensive items quoted in US Dollars should be paid in US Dollars and the others should be either in Thai Bahts or in Lao Kips, otherwise you will not have as good rates as should should. While US Dollars is convenient for carrying, Thai Bahts and Lao Kips may be bulky and not convenient while you are travelling.
Make sure that you spend all of your cash in Kips before leaving Laos, as the currency become almost useless outside of the country. You can convert Lao Kips into US Dollars or Thai Baht at many local banks with a small fee.
If your trip involves travelling in remote areas, it's better to be prepared with plenty of Lao Kips or Thai Bahts, the latter is preferred since it's more convenient. The reason is that in many remote areas, US Dollars is not preferred and either not accepted or accepted for a very low exchange rate. Also you should always be armed with some Kips for daily small items such as drinks, fruits...
There's virtually no ATMs in US Dollars at the time of writing in Laos. When travelling, make sure you have enough money in cash for weekends.