Bad English translations from Chinese have long been a comic favorite. One I like is a menu that offers stir-fried Wikipedia (does it let you edit your own meal?). Another great one I recently came across is a Chinese restaraunt called "Translate Server Error". Oops.
Personally I find these errors not only hilarious but also endearing. However, the Chinese government is trying to get rid of all these mistranslations prior to the Beijing Olympics. And some of them are certainly offensive enough that it's good they're hunting them down. For instance, a handicapped bathroom gets translated as a "Deformed Man Lavatory."
But perhaps we're looking at this the wrong way. Wired has a great article that suggests that this Chinglish may not be wrong at all, but instead simply a new variety of English. They cite a surprising fact: "By 2020, native speakers will make up only 15 percent of the estimated 2 billion people who will be using or learning the language [English]."
In the US, we tend to talk more about Spanglish. The response to which is often remarkably similar from Spanish and English speakers alike. I just spent 3 months in Madrid, and there was the same sort of worry about Spanglish "degrading" the language that sometimes gets talked about here. Personally, I think we need to accept that languages evolve, always have and always will. Better to go along for the ride, then fight it. Wired ends their article quite controversially: "Soon, when Americans travel abroad, one of the languages they'll have to learn may be their own." What do you think?