I have toured almost the whole country by train, and I must say that's the safest and most comfortable way of discovering the country!

Which class?
I routinely opt for the hard sleeper as it's economical, yet comfortable enough. The only drag: The attendant will turn off the light when she pleases (often as early as ten p.m.!). I think this is nanny state mentality! Soft sleepers have doors you can close, and in some you can keep the light on (on your bunk). The latest hard sleeper carriages also have a special night lamp to each bunk - you can read after curfew!

Availability of ticketsa little tricky sometimes, but a great way of avoiding disappointment is by going to a travel agent inside a luxury hotel. They may get preferential service at the train station for their guests, and it won't cost you an arm and a leg - say 30 kuai, sometimes 20 per ticket. You don't even have to be guest at the hotel!
In Kunming: Go to the King World Hotel; in Guangzhou go to the BAIYUN HOTEL; elsewhere find a 4/5 star hotel!

Why trains?
First of all, you are ten times safer than on the road! China is one of two countries in which I sat in a bus involved in a serious traffic accident (I survived with minor scratches in Turpan).
Also, you can bond with some of your fellow travellers; this is less often happening now, but it used to be easy to beco0me friends with Chinese tourists or home returnees!
Thirdly, it's a great way of seeing some landscapes en detail while you are comfortably ensconced in your seat; carriages now are air-conditoned.

Speed:
Chinese trains on average are a bit slow, but they have been making tremendous progress over the last ten years! Initially, their average speed was around 60 km per hour; now it often surpasses 100 on long-haul routes! And then, there is a high-speed train being considered between Shanghai and Peking that will travel at well over 200 km per hour; if the German supplier of Maglev technology will be accepted the train will race at over 500 km per hour; if it's a conventional ICE or TGV from Germany or France respectively, or a Japanese Shinkansen, the speed will still top 250 km an hour.

One of the best ways to see and live China!

I love travelling by train in China. I think it is one of the  best ways to meet people and live the countries culture.

I think it´s a good tip not to book the bottom bed! For the Chinese it is just perfectly alright to use the bottom bed during the daytime for sitting, since otherwise there would be no possibillity for everyone to sit.
I guess this is alright since you can´t expect people to be squeezed in the top bunk, right at the neon lights and the speaker with chinese "travel music" blasting into your ear. (and this is the secret why the bed in the middle is undoubtly the best choice!!!)

Sure, the system of selling tickets isn´t the most convinient, I absolutely agree, and a person not speaking Chinese will probably have problems with buying tickets or finding their way.
But I think one of the most important things while traveling a foreign country is being open and tolerant to the differences. And if you are, you will have great experiences meeting people from all over the country.

I have to add in 2 years living in China I never had problems with the seat or bed I booked being taken. As soon as I showed my ticket, people always got up.
Besides that, the inspector in the sleeper carrige collects your ticket at the beginning of the trip, puts it into a little book and gives it back to you shortly before you have to get off the train (Great thing-  everyone can be sure to get off at the right stop, even during nightime!). So they normaly make sure that everyone has a valid ticket and is in the right bed he or she booked.

I love traveling by train, and even I could afford a soft sleeper sometimes, I usually go for the hard sleeper, because it´s much more fun!