The most important fact is that when you are a friend of some one, you have much more influence to that person, assuming that person want to be your friend. The good example is that the reason US needs China in negotiation with North Korea because China is friend of North Korea so that having much more influence to them.

Chinese government is like US government 20 or more years ago.  They have a few human right problems (not to say we have a few human right issues in US too now).  US wants to influence them by dialog.  I do not think Chinese leaders are monsters. They also want to improve their people living standard, happiness and their image in the world.  Confrontational approach would not work for Chinese leader if you understand Chinese culture.  So cultivating trust and friendship between two countries is very helpful.  It would bring more changes in China in positive direction.  If US make China as an enemy, I think it is bad for both countries and would not bring positive changes in China.

Tibet independence is impossible.  It is not going to happen.  This is the fact.  So the key issue here is to influence Chinese government to improve the situation in Tibet.  Dialog is the solution.  To boycott in any way to Olympic game in Beijing is not a good way to improve situation in Tibet.  It would only anger Chinese people and make situation in Tibet even worse.

Blaming China for Darfur problem is not fare.  China does have commercial interest in Darfur.  On the other hand Chinese government does not like confrontation approach to Darfur too.  They are working on to improve the situation in Darfur.  Maybe China could push for more improvement in Darfur.  But how much is a really art and hard to say.  US needs to find way to influence Darfur government too, not just press Chinese government.

US should not export western style democracy to China.  Because of long history and culture of China, it would develop its own style of democracy.  The western style of democracy may not fit Chinese situation.  One point I would like to emphasize is that democracy is not a goal; democracy is A way to make people living happily without war, conflict, starvation and etc.