So I recently got my X Visa, as I was intending to go to Yunnan University for the Chinese Language program, but am now seeing if I can't just travel around with some native-speaking friends, as it will be a cheaper way to learn. The problem is that I don't want to change to a tourist visa if I don't have to. My impression was that most people got a 30-day X Visa with no re-entries UNTIL they got a residence permit—at which point the government pastes another visa-looking-thing into your passport.

But the Visa I have right now says I have a full year with multiple re-entries. It simply has a printed-out note stapled to it advising me to get a residence permit within thirty days.

If I do not register at the University or get a residence permit, will this Visa become invalid, even though it says it is good for a year with multiple re-entries? Not sure if I should take the money/effort to try and switch it if I don't have to. At the same time, I don't want to get fined or refused re-entry.

If you do not register with that specific university, the visa is invalid.
China has recently had a clampdown on visa abuse. It is more likely now that you will get caught out, than it ever was before.

If you get caught you will get a fine and deportation. You also risk detention time if they can't sort it out immediately. How you would be treated is very subjective depending on the officer, the place and many other things.