2) Medal counts, as discussed earlier. Both the "Chinese system" and the "US system" of national medal-ranking have obvious flaws. Chinese system = only gold medals matter. US system = all medals count the same. Obviously some "weighting" system would be more sensible -- say, 3 points for gold, 2 for silver, 1 for bronze.
Of course the most sensible approach would be to dump country-ranking altogether, given what an odd assortment of sports are aggregated to determine total national "success." Skeet-shooting; hammer throw; badminton; the triple-jump; wind surfing; trampoline; team archery; beach volleyball; one more stop on the pro tennis tour. Compounding this is the imbalance in "medal richness" among sports. Even if Kobe Bryant were as dominant in basketball as Michael Phelps is in swimming, there's only one gold medal to be won in hoops, or a maximum of two for Roger Federer in tennis. (He got one, in doubles.) So individual athletic celebration would be best. But let's stay in the realm of reality.
While the bizarreness of Olympic sport-selection means that not even a sensibly weighted system would say much about a country's overall strength, merits, soft-power, future prospects, average fitness level, etc, the contrast between the "Chinese" and "American" systems does show something about their respective athletic systems.
Mainly because the United States is so much richer than China, a far larger share of its young people participate in organized sports of some kind. Ivy League admissions directors complain that they have to set aside a big chunk of their entering classes to ensure that sports rosters are filled (fencing, lacrosse, men's and women's crew, football, etc). No elite Chinese university has ever had that complaint. The national sports system in China has instead concentrated on picking a few people, very early in life, and training them intensively for specific Olympic disciplines. That is the point of stories like these, mentioned earlier.
The US system provides a deeper pool of athletes in a narrower range of popular US sports: swimming, basketball, track and field, etc. Australia is the extreme example of this approach, with 1/10th as many people as the US and 1/40th as many as China but still presenting deep squads in swimming and rowing. (For a while on Sunday, with swimming and rowing just done, Australia was #3 in overall medals, behind the US and China.) China has a more systematic approach to developing a few potential champions in as broad a range of competitions as it can cover.
These are different approaches, suiting the wealth and to a degree the social systems of the countries. Not better or worse, but with different medal implications.
Update: I should have read Wednesday's Wall Street Journal when it arrived! Ian Johnson has a story on this same pattern, pointing out that in theory the IOC discourages country-ranking at all. After the jump, an interesting quote from the story about different opinions on the two systems.
From the WSJ:
Both systems have their supporters and detractors. The argument for the gold-first table is that winning is what matters. Chinese-sports historian Lu Yuanzhen said Chinese sports officials have a slogan for it: "One gold is worth a thousand silver."
Ranking countries by the number of golds instead of total medals is "a stupid idea," says Gennady Shvets, press attache for Russia's national Olympic committee. His argument, in fact, is in keeping with the U.S.-centric point of view. Mr. Shvets notes that the gold system means that a small country with a single champion who wins, say, seven gold medals would be ranked according to this system ahead of a big country like Russia that won, say, six golds, 20 silvers and 25 bronzes. "And this big country would be below this one guy," he complains.