Hey Sticky, I live in China, use all my holidays to travel here and was in Yunnan last month so I can point you in the right direction.
Basically in Yunnan you have the capital Kunming, Lijiang City, places near Lijiang, Shangrila and a few other cities.
Kunming is a nice city but nothing special travel wise so you don't need to be there for more than two days. You fly into Kunming from the big cities such as Beijing and it serves as the entry point in Yunnan. In Kunming the two places to see are teh Stone Forest and Dianchi Lake. Nothing really special about either fo these but worth seeing.
From Kunming catch an over night train to Lijiang and this is where the fun starts.
Stay in Lijaing's Old Town and enjoy the place for a day. Old Town is nice but very touristy so a day is enough. In the Old Town, wander the streets, see the 700 year old Mu Palace. You can also see the Wangu Tower in the Old Town which is nothing outstanding but has great views.
Like a few other people have said, you HAVE TO hike the leaping tiger gorge trail which has incredible views of the Jade Dragon Snow Mountains JDSM and is almost 2 kilometers deep in some parts. You can hike it in two days but i recommend you give your self at least 3 days to enjoy it. Stay at the Half Way Guest House which has those awesome toilet views. Their number is 13988700522. You can get a bed there for $5 with views no 5 star hotel has.
From the end of the tiger leaping gorge trail, catch a bus to Shangrila and hang out there for a few days. Visit a few sites like the Ganden Sumtsenling Monastory, go for a ride out of town to enjoy the steppes and local Naxi people. A god hotel in Shangrila is the Lamtin Youth Hostel, their number is 0887 8876868.
The other places to see in Lijaing are 1-the Jade Dragon Snow Mountain reserve where you can take a cable car to an altitude of 4,5000 meters and check out some glaciers and see the Blue Moon Valley lakes and 2-Black Dragon Pool which is just north of the Old Town.
A great way to enjoy Lijiang is to hire a bike and go for a ride out of town the same way you do in Shangrila.
If you can do all of that, you are in for a smashing holiday and will see some stunning country side that you can't find in New Zealand
Feel free to PM me if you have any questions.