hey, i just returned last week from yunnan... i backpacked there for two weeks... go see Mei Li Xue Shan.. it's definitely worth it if the weather is good... here's how to get there...
from Shangrila, you take a bus to De Qin... the bus runs only once every three days, so you have to get your ticket as soon as you arrive in Shangrila... the road is very bad and it's a tough 10-hour journey, but its a very picturesque journey... try to sit on the left hand side of the bus if you wanna take photos of the beautiful gorges and snow mountains from the bus...
when u reach Deqin, take a taxi (RMB30) to Fei Lai Si... the HI hostel there is brand new and the boss and lady boss are very friendly people (from Beijing), highly recommended place to stay... only RMB40 per bed per night... from Fei Lai Si, you can get a great view of Mei Li Xue Shan...
There will be more than a couple of people in Fei Lai Si going to the foot of Mei Li Xue Shan, so you can join them to book a minivan or 4WD (RMB150) to go down to Xi Dang village together... ask the Feli Lai Si hostel boss to help if needed...
from Xi Dang village, walk 5 to 6 hours to get to Yu Beng village... you will trek through a beautiful forest (like in Avatar!) and over a mountain ridge (3700m attitude) and see a glacier of Meili Li...
I stayed in Yu Beng for 3 days... the first day we went to Shen Pu, the holy waterfall... it's about 3 hours one-way... beside the waterfall is a glacier... bring your slippers to change at the waterfall and go around the waterfall like the Tibetans do...
second day, we went to Bing Hu, the glacier lake... get a Tibetan guide to show the way... it's about 4 hours one way... it's uphill climb most of the way to an attitude of 3900m...
the third day, we went around a mountain ridge to walk along Lan Cang Jiang to Ni Nong village then to Xi Dang village... from there, book a 4WD to return to Fei Lai Si...a Tibetan guide is necessary for the trekking... the guide fee is about RMB50 per person... it's a 10-hour trek through the awesome gorge, one of the most beautiful in China and surely more beautiful than Tiger Leaping Gorge...
here are suggestions for other parts of Yunnan...
Kunming:
Shi Lin is a must-go. Take a train or bus there. The trip will take the whole day.
Dali:
Take a taxi from the Dali Old Town to Gan Tong cable car (RMB20). Ride the cable car up Cang Shan (one way cable car is RMB50) and walk up the Cang Shan Gorge. Then walk 3 hours to the Cang Shan Cable Car station and take the chair lift down. You get to see Er Hai and Dali county.
Lijiang:
Nothing much in Lijiang. The Snow Dragon Mountain cable car is not operational until November, so need not bother to go Snow Dragon Mountain. there isn't much snow in Snow Dragon anymore.
Shangrila:
Go to Ge Dan Song Zan Lin Si in the evening (after 6pm) and you may be able to avoid paying the admission tix (RMB80) because the guard knocks off at 6pm. A lot of construction work there now to build a new monastry. Go behind The main monastry to see the while stupa with lots of jing1 fan1 (tibetan flags).
Bai Shui Tai is not bad also. It's 3-hour bus journey one-way, so it will take the whole day... the Bai Shui Tai area is very small only, 2 hours are more than enough...
have a good trip! Zha Xi Te Le! (it means "greetings" in Tibetan language)