HI,
Just like in USA, there are multiple telecoms. Each use their own frequency and technology. For example, Verizon uses CDMA, and hence the phones are not compatible with ATT and T-Mobile. T-Mobile and ATT both use GSM for the 2G low-speed network, but use different 3G tech.
In China, China Mobile and China Unicom both use GSM for low-speed. China Telecom uses CDMA, so less comparable with everything, but their plans are the cheapest (many free minutes bundled with the telephone service you get anyway). China Mobile uses TDSDMA or something for their 3G. Its a standard only used in China and only works with some phones. And NO ONE BUYS IT. ITS stupid. China Unicom uses WCDMA for the 3G, which is the same as used in Europe, HK, Taiwan, and many places.
BUT, China Mobile has the best 2G GSM network in China. I disagree with previous poster...you don't need 3G to enjoy a smartphone. China Unicom really does not have nearly as good coverage (2G and 3G) as China Mobile, so I get a lot of dropped calls where I live. That may be different in Beijing though.
China Unicom is cheaper. I have 500 minutes and 700MB for (if I remember correctly) 190RMB/month. China mobile account I last used had 800minutes for 260 RMB, plus 20RMB for 150MB data.