Kuala Lumpur - Flight lands at 4:40am - What to do?

Assuming that you will stay in KL for at least another night, I would go to the place you want to stay at, and spend at least 2 nights there (even if the first night is very short).

If me, I would go to a hotel and take a rest there.

By the time you get out of the airport and into the centre, it will be maybe 7am or so.

I wouldn't bother booking a hotel for that morning, but book it for the night after.

When you arrive ask them if the room is available for an early check in.They will probably let you have it for nothing, or a small amount of cash.....a lot cheaper than paying a standard night rate.

If every room is full just crash in the lobby for a few hours until someone checks out....

If every room is full just crash in the lobby for a few hours until someone checks out....

If you are unlucky you'll have to wait until 2pm. I guess it all depends on how desperate you are to save a few dollars or Euro.

I am with @lucapal and would not book the room for the remaining few hours of the morning. As @CrazeeCatrin has even considered crashing down at the airport upon arrival, I think she is not to keen to pay for those few hours either.

As for the hotel room vs hostel dilemma: Hostel dorms can be good places to meet fellow travellers but they can also be horrible. I once booked a KL hostel online that seemed perfect on the web, only to find that all other guests in my dorm were a group of Indians entering the dorm at hours like 3-4am, turning on the lights, shouting around in Hindi (or whatever lndian lingo) and playing loud Indian music in there all night, with the hostel staff not caring either. There were basically no common areas for socializing either. It was perhaps my worst stay in KL ever!
A compromise solution can be booking a private room in a hostel, then perhaps moving into a dorm after checking out the place.

I wouldn't book in advance in KL - as noted above, there are some wretched places to stay in the city. It's definitely a place where I, at least, want to have a good look at the guesthouse before I agree to stay there.

By the time you clear immigration and head into the city, it will be getting light already. My suggestion would be that you head to Chinatown (one stop on the metro from KL Sentral train station, where airport transport into the city will take you), and have a look around there for a place to stay. There are dozens if not hundreds of guesthouses in Chinatown, all in a small area. It's easy to wander around and check out places yourself.

I think www.travelfish.org has the best reviews for accommodation in the region: you could use that (or other sources online) to come up with a few guesthouses in advance that you want to check out.

though I've never been in this kind of situation in KL, I have on quite a number of other occasions, in other locations in the region, arrived at the airport at this kind of hour. As others have said, by the time you clear immigration and get downtown, it will be daylight anyway and once it is daylight, then that seems to be the criteria for when more inexpensive hotels and guesthouses will allow an early check in. When it's 4am and still dark, you have no chance - you'll have to pay for the 'night before', as it were. But when it's 8am, the shift at the hotel has probably changed, the day has already begun, and you likely will get an early check in. After a gruelling journey, and when it is a place you have never been before, I'd not be going for a dorm in this situation, but an inexpensive private room.

You can stay in the Capsule Hotel at KLIA2 fr 80 RMB for 6 hours.

http://www.capsulecontainer.com/booking.php

star shuttle buses go from the airport to downtown (chinatown) on the hour every hour, cost 10MYR and take a little over an hour). By the time you are through customs etc, you'd probably get the 0600 and be in town around 0730 which should be fine for a walk-in check-in that day. More expensive travel options will get you there earlier.