Read some background information over at CNN:
http://www.cnn.com/2006/TECH/internet/02/15/china.us/index.html
On one hand Google rips aparts the U.S. governments bid to obtain information to help keep the U.S. citizens safe; then on one hand they pretty much agree to self-censor their web content because if they don't do it, someone else will.
It is not up to the companies like Google and Yahoo and other corporations to decide if they should do business with a communist regime - that is up to the people here in this country (the U.S.A.) who elect officials to govern our beliefs and values.
Freedom of expression is one of the most basic rights that all Americans have, it is what this country was founded upon and it is why innovation and hardwork prevails in the culture of America. There have been many people that have died or have been injuried defending our values. Yes, we may disagree about political parties and the conservative vs. liberal persepective - but I think we can all agree that censorship is not good for our American values.
Turning towards the middle east, I still am dumbfounded that a few cartoons have caused such a tragic loss of life and more is certainly to come from. Yes, I don't take kindly to depictions of Christian cartoons of the same nature, but this is a democracy and we must be willing to allow all views to come forward without persecution. Hence there is the problem, the countries you see threating to kill the cartoonists are not democracies. If we don't like what is being said, turn the channel; stop purchasing their products; shop at another store; visit another website - we don't threaten to kill the source!
There has been far too much invested over the past few hundred years of America to just sell out because everyone is doing it and we are going to miss out on a billion person market. Far to many people have died, sacrifices have been made and too many tears shed for us to simply just accept less than what America has stood for.
Just remember, the Chinese regime thought nothing of killing innocent people that just wanted freedom of expression. To the corporations and technology companies that are now sleeping with the enemy; remember, this could happen to you too:
"A massive demonstration for democratic reform, begun on Tiananmen Square by Chinese students in April, 1989, was brutally repressed on June 3 and 4, 1989. It was initiated to demand the posthumous rehabilitation of former Communist Party Chairman Hu Yaobang. Martial law was declared on May 20. The protesters demanded that the leadership resign, but the government answered on the nights of June 3 and 4 with troops and tanks, killing thousands to quell a "counter-revolutionary rebellion." Zhao was dismissed and a number of the student leaders were arrested. "
We must not restrict the freedom of information to flow; or we too might find ourselves standing before a column of tanks one day.