It's been almost exactly a year since I was in Luang Prabang. I paid $10 for a perfectly acceptable double room with a bathroom. And it was completely real.
Yes, there are room in LP for $10-12. This is a fact, meaning the OP's expectations are not that unrealistic. Not sure what all the back and forth is about. Let it go.

I went in Oct 2011. I checked out some rooms and they looked pretty plain, almost prison cell looking. If you decide on one of these rooms definitely bargain hard as there are much nicer options in LP.
Then I got very very lucky, and went to a guesthouse with a new staff member and got a room with two twin beds, balcony with view of the nam song, hot shower and a/c for 70,000 kip. Turns out the poor new guy quoted me the wrong price (it was supposed to be 120,000 kip) but they honoured it as long as I didn't mention it to the other guests lol. Very friendly place, clean, etc. but not on the main road so it was a walk to get there which was fine since I was getting a great price and gorgeous view. I can't remember the name, but I do know it was definitely not in the Lonely Planet or anything like that, as were all of the other places I saw.
So perhaps not being on the main street lowers the price as well.
""This is incorrect. LP is significantly more expensive."
Not when I went, mid Dec 2012."
Herbie you beat this tired drum every time there is a related post. I have been to LP about 8 times for pleasure and business. Other posters also agree that LP is quite a lot more expensive than Vte. In fact workers from orgs and businesses in both cities get a subsidy to live in LP as the col is higher.

Probably depends where you look, but central LP it is quite possible to get a ensuite double for around $10 even in peak season and there are loads of places to choose from. I went VTE twice, mid Nov and mid Dec, and in the centre, near the river it was a job to get a single shared bathroom under $10 and in Dec could not even get that, so had to take a grotty double for 90,000 kip. Sorry my experience is wrong but can't change that.
Google Maps:
19.885555,102.139034
19.886377,102.138814
2 Hotels, Double/Queen bed, TV HBO, private bath, hot shower ,Wifi ,Car Parking
for 80000kip.
Have stayed in both, in Thailand you would pay from 600 bath for a similar standard.
These Hotels I've only asked for the price but haven't stayed there:
19.886521,102.140381
Room shared bath, from 60000kip
19.886889,102.133187
Room shared bath, from 50000kip