A combination of altitude and rough tracks makes cycling in Bolivia quite tough. Altitudes on the altiplano vary between three and four thousand meters, and the lack of oxygen is quite debilitating. Aclimatising takes a little time.
The paved roads we cycled on (La Paz - Oruro and La Paz - Copocabana) were in good condition, but there are not many of them. Most of the road network is dirt track which makes for some hard pedalling. The rough conditions make a mountain bike the best option (we used hybrids). The tracks also take their toll on the equipment. By the end of our trip our racks were starting to fall apart (take plenty of wire for running repairs)
Water can also be a bit of a problem.
The altiplano is basically a desert and water is really only available at habitations. So you need to be able to carry about a day and a half to two days water, depending on where you are going. We carried about 10litres between the two of us.
Buses
Most people get around Bolivia by bus. In general the buses are quite modern and comfortable, e.g. reclining seats. The overnight journeys are not too bad at all. Providing we joined the bus at its starting point we didn't have any problems getting our bikes on the buses. Occassionally there was a surcharge of a few dollars.
Security
We didn't have any problems on this trip. However, over the last few years there have been a few problems with peasant revolts, typcally involving road blocks. A few weeks after we left, the town of Uyuni was blockaded by the locals and a few dozen tourists were trapped there for a couple of weeks.
In common with most capitals of developing countries a little common sense care needs to be taken in La Paz, i.e. try not to look conspicously wealthy.
Hotels
Accomodation in Bolivia isn't dirt cheap, but it is not too expensive either. In La Paz, on arrival we stayed in the Hotel Happy Days, basic, but comfortable for $16 for two. On our way out, we tried the Hostal Republica, spacious and upmarket for $30. Out in the country things are significantly cheaper.
In Potosi, we enjoyed our stay at the the Hostal Compania de Jesus ($16).It is in a beautiful building and the family who run are very friendly.
The best hotel of the trip was La Cupula at Copacobana on the the shores of Lake Titicaca. This is one of the prettiest hotels we have ever stayed in and it has great showers.
Food
Bolivian cusine is might not win any Michelin stars, but there is generally plenty of it. The trout from Lake Tititicaca is very good.
Salar de Uyuni tour
There are a number of tour operators offering the classic four day tour of Salar de Uyuni and the south west lakes and desert. It is easy to book a tour on arrival in Uyuni. In the quiet season you may have to wait a couple of days for the the tour company to fill a jeep. I have heard a few horror stories about the lower end operators, e.g. drunken drivers, breakdowns, so it is probably best to go with one or the more well established companies. We went with Tonito Tours and we were entirely happy with our trip. Colque Tours also has a good reputation. We paid $90 each for a 4 day trip. It is a very worthwhile trip, but here are a few words of warning:
All the companies have to make a profit, so you may be a little crowded in the vehicle. This is significant because you will spend alot of time in it.
The accomodation is likely to be pretty basic,e.g. bunks in huts
The food is also likely to be quite basic (that said, ours was suprisingly good).
Tt can get very cold on the trip - take plenty of warm, wind-proof clothing.
Taking a large water bottle and water purification tablets will save you from having to buy overpriced bottled water en route.