There are three mobile carriers in China - China Unicom, China Mobile, and China Telecom. They don't offer pre-paid packages, but have no-contract plans that are available on a monthly basis. To purchase a plan, you will need your passport.
Unicom is the official iPhone retailer and the only 3G provider compatible with iPhones from other parts of the world.
Plans begin at 46RMB (approximately $7) for 150mb of data and 50 minutes of local calling time. For 66RMB ($10), you get 300mb of data, 50 minutes of local calling time and 240 text messages.
Don't bother with the street vendors, they're known to clone SIMs which are unusable. Go directly to an official China Unicom store. You're more likely to find an English-speaking assistant to help you connect too.
Unicom stores are everywhere, ask the staff at your hotel to point you in the direction of the nearest one.
Airport stands are also an option, although they are more expensive. There is a China Unicom store on the second floor on the east side of Terminal 3 at Beijing airport, next to the McDonald's. about 4 years ago