Shanghai is a very good first stop in China. It's very modern and can ease a traveler into the Chinese heartbeat. This is a model city for China, and is dubbed as the "dragon's head" of the Yangtze River.
The fist time I visited China was in 1994. It was already completely different than the 1980's. I visited the city again 2 years later, and saw more improvements - new buildings, new highways, a new subway line, etc. On my last visit (summer of 2001), Shanghai had a completely new face.
One can no longer tell the difference between local Chinese and foreign Asians. Huge shopping centers were open providing top services. You can finally tell the difference between the police and army with the cops' new sharp, dark-blue uniforms. Taxis are more reliable and friendlier - you'd never get swindled with a "DaZhong" taxi. The subways are very clean and quiet. Newer busses started appearing, and experimental public busses with TVs were being tested. 
I hardly saw any spitting this time, except for an occasional migrant worker here and there. Locals sit in outdoor cafes and freely talk politics and criticize (something unheard of just a few years ago). And guess what happened to the site of the founding of the Chinese communist party?! It's now a Soho type area with bars and art galleries, known as XinTianDi, very popular with the expatriates.
In the Western part of Shanghai (PuXi or old Shanghai), the mansions and buildings of its colonial days are mostly being restored. There's a stress on "green space" so, many old houses are being torn down to make way for public parks. And you'd also get a rim of plants growing on the side of highways. On Friday and weekends, the rim of the highways light up. The colorful spotlights on the Bund and the lighted colonial buildings provides really awesome views. In the People's Square (Ren Ming Guang Chang, formerly the racetrack) contains the Shanghai History Museum, the City Planning Museum, the Shanghai Grand Theatre, a government administration building, an underground mall, and a public park. These are must sees!
On the other side of Puxi is Pudong, formerly farmland and is now the ultra-modern financial center of Shanghai. The buildings there will remind you of a science fiction movie. They've a newly opened science museum that played host to the world leaders during the APEC meetings. The TV tower contains an Old Shanghai museum. All highly recommended!
Shanghai's becoming a very international and modern metropolis. Plenty of places to visit. There's a very active club scene. The city is also a shoppers' paradise! Lots of legitimate products and bootleg products for very good deals, and don't forget to bargain!
Careful when buying Chinese DVDs since they've regional settings. US and European DVD machines can only play ones with certain settings. Chinese DVD machines can play them all. The only DVDs that worked on my US machine were the ones that were copied off of a real US DVD. Computer DVD drives can play all settings.
Shanghai comes highly recommended from me. It's best to travel around fall, since winters are terribly cold, summers are hot and humid, and monsoon season during spring.
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