I prefer traveling by air or bus instead of by train. Reasons are:
For long distance traveling, which usu happens in such a big country, train can take years of time. It's totally waster of lift. Imagine that moving from Beijing to Urumqi, it takes more than 3 days by train but only 3 hours by air. What's more, tickets of great discount (70% off if you are lucky) can always be got at the ticket offices on the street, sometimes much cheaper than taking trains. :)
For short distance traveling, bus can be always a good choice, with much flexible schedule and better conditions. As long as I know, highway or super highway have reaches every corner of China, including remote Tibet. It’s faster than trains in most of situation. However, if traveling time exceeds 8-10 hours, bus is largely disencouraged, when you'd better resort to air.
However, my top choice goes to travelling in my own car, after I own one, of course :)