Olympics is supposed to be about athletics. However, it's never lacked of political influences. The Olympics started off with religious background and worship. Today, like many other things, the Olympics Games are nothing more than the dollar sign. If held in the UK, it would mean more pound; if held in Malaysia (if ever!), it would mean more Ringgit; and the focus of the world now, more RenMinBi.
When it comes to China, Taiwan and Tibet are as prominent as the Great Wall. Unlike Hong Kong and Macao, Taiwan is the runaway bride, where the former opposition party Kuo Min Tang resides. It wasn't sold to foreign countries as a part of treaty. Therefore Taiwan, IMHO, is not much "shame of the country" as Hong Kong and Macao.
Tibet, however, is the radical state that wishes to be independent of the mainland. There's a Chinese saying "the emperor is far away from high mountains" (山高皇帝远), which I think suits Tibet quite well. China is so big and Tibet is in the far west. Ideally, I would like Tibet to be the holy land of China. It could become the religious land for China, like Mecca for the Arabian world.
My take on this is: Tibet doesn't have to be independent unless its people really want to. However, I do not agree with the way the Dalai Lama approach the US so that he can have a strong ally. I think this is the matter of the family (家事), we do not need an outsider's (外人) two-cent worth.
Dalai Lama has been perhaps inspired by the Pope. He wants a Vatican City for himself. He dreams of the Tibetan City. Don't you think the deal would be so extremely attractive? If Tibet is independent and hence can exert control over all temples in the world, he can be as rich as the Pope. Just imagine the flow of pound, USD, AUD, Franc, RM, Rupee, RMB etc...
The Dalai Lama is, in my opinion, the worst of Buddhist possible. Buddhism is about 贪-痴-嗔 (greed-stubbornness-anger). His pursuit of Tibetan independence, no matter how beautifully sugar-coated, is explicitly personal greed. The insistence of this pursuit is the demonstration of stubbornness (执着). Yea yea, you are doing for the Tibetan people. Just like how Osama bin Laden is doing great things for his people. How can the Dalai Lama escape the pain in the wheel of death and reborn (轮回) when he's so immersed in this anti-liberation-from-karma chaos. I thought he should have been so clear and enlightened about all of this after being reborn 14 times?
The US definitely sees this as the golden opportunity in strengthening its political flagpole in Asia. Where else is more convenient then the right and left of China - Taiwan and Tibet? 左右逢源 has never been used in this way until now. Just like how it stretches its imperialism claws in Southern American and the Middle Eastern countries, those claws are scratching sharper than ever on the Chinese sides.
Is it fair that other countries boycott China because of this? Is China strong enough now to say "I don't care if you boycott me"? French has gone ahead and boycotted China for the Olympics opening. Almost every western country like to stick their arrogant big noses in China's human right issues. Isn't that the same as Islamic extremists saying to western people, we don't like your women to expose themselves? You say to-MA-to, I say to-MAY-to.