Hi All,
I wanted to update the thread and share my experience, so people coming to Kunming with the same questions can benefit from our experience.
We had the package sent - through USPS - using the address mentioned above. Although we gave our american contact the address in Chinese, they DID NOT include it on the package itself, so the address was in English only.
We sent the package using Express service and it took 9 days to arrive. Turns out that if you send it priority - not regular mail - it will be handled by EMS on the Chinese side, and NOT China Post.
We found out that if you have a Chinese phone number, including it on the package (in the address portion) means they will call you (or at least they're supposed to call you...) when it arrives.
We used tracking, and it was NOT a up-to-the-minute kinda thing. basically, once it left the US, it took 4 days to update that the package arrived in China, but no more updates. once it arrived in China, we found out that calling 11188 (with a person who can speak Chinese, of course), and inquiring after the package actually gave us the approximate package location. (Today, that person was Kris from Salvador's, who went above and beyond to help us out. you rock Kris!).
Once we found out the package arrived it was a non-issue - we went to the international post office, paid 3 Yuan, and picked it up. It looked like it had been kicked here all the way from the States - reminded me of that opening scene of Ace Ventura :) - but nothing inside was broken...
We heard that if you use a box that has a large logo of a company like Amazon/Zappos, you're less likely to have the package get stopped at customs. We did have a Zappos box, and that seemed to work well for us... We didn't have to pay anything else to anyone. I guess it's kinda of a dice roll.
Overall, we are quite happy with the process - it worked quite well :)