Certainly invasion isn't an option, and neither is "boycotting" a country whose market is greedily eyed by every nation larger and more industrialized than San Marino. But I still can't help but think that an Olympics is a reward, and China will do exactly what it has done for dozens of years: make tiny gestures in the public eye to look better for international press, while it continues to institutionalize dissidents, jail followers of religions it doesn't control, and kill Tibetans who refuse to allow their land to be confiscated.
China cannot be reformed. It's a continuum, a culture that, regardless of the change of the guard, has existed with many of the same social norms for more than two millenia. Denial of an Olympics won't help, but it sure as hell would send an honest message to Beijing that its policy aren't fooling everybody.