There is no shortage of prayer wheels, flags, or any kind of memorabilia in Lhasa. The best place to get these goodies is the Barkhor circuit on the periphery of the Jokhang Temple. Along with religious gifts, there are teahouses and vendors selling yak butter and Nepalese biscuits, jewelry and scriptures. Be prepared to bargain hard.
If it's supplies you are after, the Lhasa Department Store is a great one-stop shop. It is a little pricier than other places but you can get most of what you'll need. If you don't want to buy, there are plenty of outdoor trekking and outdoor stores where you can rent sleeping bags, stoves, fleeces, tents, etc. Most items are also available for sale.
