If you want to understand the role of the Internet in the development of the current situation in China, this is the best article I've read on the subject:
In the weeks since the protests, riots, and government crackdown in Tibet hit the headlines, Chinese coverage of the events has gone through several incarnations. It began life as a terse state press-release, then refashioned itself into a front-page struggle between embattled civilians and scheming "splittists", before arriving at its current manifestation: the public shaming of the purportedly anti-Chinese western media.
On the face of it, these changes have been mandated from the top down. But behind the curtains of China's official media, networks of active internet users have played a key role in shaping the course of the reporting of Tibet.
It includes this fascinating nugget:
"In the beginning, the government had been hoping to keep things quiet", my friend Bei Feng, an editor of a major Chinese web portal whose blog was chosen in 2007 as one of China's ten most influential, told me. "But the actions of netizens forced them to widen their coverage." He himself was an example of this sort of net activism. When news of Tibet broke, he employed a strategy he says he commonly uses for sensitive issues, posting a story about it on his blog and then taking it off after only a few hours to avoid being shut down by censors. The window of time is narrow, but gives readers ample opportunity to copy and paste his story into chatrooms and bulletin-board systems.
And concludes with this interesting thought:
As he offers rice wine to those seated near him, Bei Feng pointed out a failing in the government's favoured method of co-opting anti-foreign sentiment. "What the authorities don't realise is that the people who are using these standards of objectivity to criticise CNN will eventually apply them to Xinhua and CCTV."
"Yes", a listener chimed in. "The common people are very smart. Sooner or later they'll expect more."
Update: Looks like it's started...
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