Given the mix of info about Vietnam and Laos in this thread, just in case anyone's confused:

Mohan-Boten is the border crossing from Yunnan into Laos
Hekou-Lao Cai is the border crossing from Yunnan into Vietnam

Vietnam also has a border crossing with China's Guangxi Zhuang Autonomous Region (bus and train options exist out of Nanning)

There's also a Vietnamese/Chinese border crossing at Mong Cai, north-east of Halong Bay, but that's only convenient for travel to/from Hainan, Guangzhou and the east coast..it's too far away from Kunming to be worthwhile.

It would seem that if the sleeper bus to Mohan is 320 Yuan so 640 return and the distance is around 725km according to googlemaps, 550 is the distance only to Jinghong, which is well away from the border, and Kunming is only around 410km from the Vietnamese border, then even if you apply for a Vietnamese visa, which costs 350 Yuan for single entry, then you will find that it costs virtually the same compared to going to Laos when you add the cost of the bus to Hekou (145 one way, 290 return).

The main difference is the time it takes: it should take 8 hours to Hekou, whereas Mohan is something like 12 hours away, so you'll definately save time by going to Vietnam, but unless you are Scandinavian, from Sth Korea or Japan, or from an ASEAN country, you will need a Vietnamese visa in advance as the border guards won't let you through otherwise.

I've done it stacks of times at the Hekou Vietnam border (always with a Vietnam visa) and even once without a visa at the Myanmar border. Without the visa in Ruili I just talked to the guards and said that I needed to leave and come back in for visa reasons and that i didn't want to go over to Myanmar. Worked a treat. Though I prefer having the Vietnamese visa and heading up to Sapa for a night or two to get away from the city while I am down in Vietnam.

Also, if you don't have a Vietnam visa, they are really easy to organise at the Kunming Vietnamese Consulate.