I'm thinking about buying an iPod in Kunming and am looking for some advice. I know that official Apple products are way more expensive in China, then, say, the US, but has anyone here ever shopped at the clearly fake apple stores around the city? Have any ideas of how it stacks up price-wise, and if the things actually work? Thanks!

The prices aren't horribly different, Apple tries to implement international pricing. Apple products, from what I have heard though, literally get exported out of China (where they are made), then imported again so they can be taxed. The overhead, I assume, is passed onto the consumer here. So it will definitely be more expensive than buying in the US (where it is slightly subsidised anyway), but not enormously so.

Quick check, US store iPod16GB = $229 USD
China store iPod16GB = 1698 RMB, about $276 USD so about $50 more expensive. Worth the trip back to the US? Worth waiting? All up to your situation...

I have bought an Apple PC in Kunming from a little Apple dealer. Its absolutely fine, I could create an Apple ID, sign on, get updates etc. As I have stated before, its unlikely the products themselves are fake, they are almost certainly genuine Apple products. And any warranty problems usually mean they get sent to a local fixit guy for claims (from memory there are several in Kunming). So you should be fine with the product, but always check over the one you are going to actually receive before leaving the store! Turn it on, ensure it all looks Apple like, check for scratches or wear or whatever and sign the warranty card.