I was in Pai the first time in feb. 2002, and again this year (nov 2007). i must say it changed alot. seems like they are upgrading this small town in the mountains to be an up-market destination. the hippie-flair is almost gone.
so what to do ? i went 30mls farther to soppong / Pang Ma Pha and was surprised how unspoiled and neat this area is - amazing ! even good accommodation is available, i.e. Little Eden or T-Rex guesthouse. but i stranded at a place named Rim Doi, a cosy little resort right by the river. the owner is german and built it himself, so it means everything is accurate and clean enough for an open heart surgery.
prices were 180 for a state-of-the-art bamboo hut and 500 for a brick bungalow with a very nice bathroom and decent furniture. i couldn't believe it. there is another bigger bungalow with separate rooms for families or small groups.
so if you are fed up with the fancy ferrari shows in Pai you should try to get back to the real Thailand and visit Soppong...