With regard to Hainan Island, while it is generally a nice island, in August you may have more rain than you bargained for, take a look at weatherbase.com and see Haikou and also look for stats on Sanya, where most of the resorts are located. I live in Hong Kong, which has similar weather pattern, and we get a lot of rain in August and the odd (well more than odd, pretty regular) typhoon in August. While in Hong Kong rain may not overly interfere with sightseeing, it can for a beach vacation. Just bear this in mind. (Do not ask why the Olympics are being held in August, including the equestrian events here in Hong Kong, even though it will probably pour with rain as it did during the handover in 1997. Has to do with luck.)

Regarding Hainan Island, I own a small B&B on the in Boao. Currently we get a brief shower around 4pm. The island is easy to get around and the kids would LOVE Monkey Island!
I am planning a short trip to China in January and want to stay away from the cold north (this is not my first visit to China). I had in mind visiting Xiamen and Nanjing, in addition to Shanghai and Xi'an. Anybody been there recently and have any advice about worthwhileness of these cities (Xiamen, Nanjing)? P

Much more to see in Nanjing than in Xiamen, although Xiamen will be much warmer as you probably know. Gulang Yu (island) is fun in Xiamen.Nanjing on the other hand is one of the old capitals and has lots to see.

Also, as you know, Shanghai and Xi'an will be cold in January. Have you thought about someplace really warm like Sanya? (flying into Haikou and seeing Hainan Island)
I agree, Shanghai and Xi'an will be cold, too. Try further south, if you want better weather -- Hainan Island or Guangzhou.
The only place in China that has beach resorts that look similar to those elsewhere is in the Hainan Province, an island in the south. I don't have specific recommendations.
The Sheraton at Sanya is supposed to be very nice or anywhere like Yalong Bay. The Hilton Sanya Resort & Spa should be open later this year but I do not know when. Sanya on Hainan is the popular place to visit.