The rule is that you are supposed to sleep only in guesthouses registered to accept foreigners and they are not everywhere. Camping is not authorized, nor sleeping in someones house (and your host might get into trouble for taking you in).
To get help to find guesthouses where you can stay:
– ask the police, they are very helpful
– at many places you will see blue signs ‘warmly welcome and take care tourists’ with a hot line number. Call the hot line and they will be able to point out where to sleep.
We travelled in Jan 2012 and we paid between 20$ and 35$ per night in tourist places. We could probably have go cheaper if we wanted to. Places were all clean and globally it was mainly good value rooms. Outside of tourist area we paid up to 45$ and the quality was going down but it was still OK.
Should you want to go somewhere where there is no guesthouse, you can always go see the police and ask for a special authorization to stay there for the night. They might authorize you to stay in a guesthouse normally not registered for foreigners or in a nearby monastery. I haven’t tried it myself but I got report of cyclist who did with success.
About camping, this is technically forbidden. That said, at many places on the road, it would be easy to find a spot out of sight to put a tent. Even if you are supposed to register at a guesthouse every night, it won’t matter if you skip a few nights (it happened a few times for us where one of the two arrived later at the hotel and didn’t fill the registration form). However, I would use the camping as a backup plan and not as a general solution. I heard a story of a guy who camp out every night and ended up being accused of being a journalist and got a bit of trouble (this was a few years back when the country was much less open).
Cycling Myanmar 
I was in Yangon last year and suppose to cycle there but I decided against it. Met a Spanish cyclist and he was cycling from Yangon to Mandalay but he said he was tailed by the police all the way. The police kept pushing him off to other places and didn’t want him to stay around. I guessed he is not so fortunate as you. Yann
HI YannThanks for your comment. I will add a warning on the subject soon. The thing is that there are area where foreigners can move freely and some where they cannot. The area where I was had no restrictions. I know that for some time the new capital (between yangoon and mandalay) was off limit for foreigners and therefore the road to get there could have been off limit as well.
<html><body><div style="color:#000; background-color:#fff; font-family:times new roman, new york, times, serif;font-size:12pt"><div><span>Hi</span></div><div><br><span></span></div><div><span>Thanks for your reply. <br></span></div><div><br><span></span></div><div><span>I would like to do it sometime but I am a beginner and know nothing much about bicycle but so far I have tried cycling all over Thailand. What route would you recommend in Myanmar and what to look out for. I know the roads are not so great and wild camping is an issue. Like your advice. Thanks so much!<br></span></div><div> </div><div>Regards<br><br>Yann<br><br><br><br style="color:rgb(255, 0, 0);"></div><style><!–filtered {font-family:PMingLiU;panose-1:2 2 3 0 0 0 0 0 0 0;}filtered {panose-1:2 2 3 0 0 0 0 0 0 0;}p.MsoNormal, li.MsoNormal, div.MsoNormal
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Yann, please send me a email at leclerc dot francis at googlemail dot comthanks
I just back from Burma 2nd feb 2014 ,would say country is much more open to tourist and I am planning a cycling trip in Burma in beginning of Oct 2014.I have seen full of tourists cycling in pagan and nyaung Oo , where many ancient temples and pagodas . I did cycle to Pegu which is 60 miles from Yangon ,I my self Burmese and lives in London.do email me if wanted to makes team in October 2014.
Hi David,
I am cycling to Burma in January 2015 and I would appreciate any info, did you go in October? How was it?
Thanks, and happy new year by the way 🙂
Eunate
Hi,
I was there in January. Warm and dry, but beautiful weather.
All the info are in the blog. Feel free to ask specific questions.
Have a good trip.