I've read she's a member of Falun gong. From what I've read of the Chinese government's treatment of those people, she's morally in the right. And, of course, in the U.S. she has the right to run her mouth.
The problem, though, is the international relations thing. Never forget the importance that Chinese place on "face". I imagine that in Pres. Hu's view, both he and Bush lost face. Hu's loss is of course far more important to him, but he lost respect for both Bush and the U.S.
China owns about a $trillion worth of US paper. I really doubt there would be any boycott of Chinese goods, here, so they'll add another $200 million this year.
An analogy: You'd like for your banker to not foreclose on you. He comes to your house to discuss it. Your little sister comes in and calls him an SOB. IMO, that's not the way you make Brownie points.
Overall, a bad scene all around.
Art