Kirti Monastery, on the Sichuan side of the village, is home to around 750 monks. Behind the monastery is a gorge with several old meditation caves. In Tibetan, "Taktsang" means "Tiger Cave" and a short hike behind Kirti Monastery will bring you to the caves for which the town is named. Hiking behind the monastery is one of the highlights of the area. Even if you don't plan on going into the monastery, you will most likely have to pay the Y15 entrance fee in order to hike behind the monastery.
Sertri Monastery, on the Gansu side of the village, is home to around 350 monks. It is the higher of the two monasteries and sits in a less impressive setting than nearby Kerti Monastery. There is a pilgrimage kora around Sertri. It is best to go in the morning as there are normally many Tibetan pilgrims also doing the kora. The entrance fee to Sertri Monasery is Y20 per person. If you follow the paved road past Sertri, it leads to several small villages home to Tibetan herders. These families are quite friendly and are worth the extra hike to reach.
The main reason people go to Lhamo is for the hiking and horse trekking. As stated above, there is excellent hiking behind Kerti Monastery. The Langmusi Tibetan Horse Trekking company arranges quality horse treks in the area for around Y150 per day, per person. They arrange everything from 1 to 5 day treks to the surrounding mountains and nomadic grasslands of the region. The company is half-owned by Kelsang, who also owns the Langmusi Hotel located across from the trekking company. Kelsang is a local Tibetan who knows the area well and is quick to help with any travel related questions you may have. The horse treks are led by Tibetan guides who also know the area well. In my opinion, the horse treks in Lhamo are better than those found in nearby Jiuzhaigou or Songpan as the treks in Lhamo go through very authentic and traditional Tibetan nomad areas.
Lhamo, despite being small, has quite good facilities for travelers. There are several inexpensive guesthouses to choose from (I recommend the Langmusi Hotel located across from the horse trekking company) as well as restaurants. The Snowy Mountain Cafe, next door to the Langmusi Hotel, serves up several good western dishes (including great pizza). The Amdo Cafe is located along the dirt road to Kirti Monastery and offers real coffee, cakes, sandwiches smoothies. They also sell an assortment of handmade Tibetan handicrafts. The Amdo Cafe is the perfect place to buy authentic Tibetan souvenirs that are made locally by Tibetan nomads. The Dong Zan Tibetan Culture restaurant, located across the street from Leisha's Restaurant, is a great Tibetan owned restaurant that serves great Tibetan and Chinese food. They have large screen TV's and also offer free wireless internet.
If you have any questions about travel in the Langmusi area or any other region of the Tibetan Plateau, feel free to send me an email at email@example.com.