However, even if China is "free" and democratic, do you really think they'll let Taiwan to be independent? That's the key issue. I don't think so. Would we let Texas to be independent if Texans voted for it? I don't think so either (and the same situation has happened - Civil War, where states independently voted for independence, in overwhelming majorities).
The biggest issue for China is Taiwan. Whether it occurs before 2008 or after, if Taiwan declares independence, regardless of teh form of the Chinese government, it will act. It will, or the government would fall because the Chinese will view their government as again, being weak to foreign powers. So whetherit's the CCP, another totalitarian regime, or a democratic one, it will have to act with force to prevent independence.
My feeling is that a free and democratic China would be something that the people of Taiwan would want to attach themselves to. It is what their own civil war was all about that resulted in the free Chinese being on that island in the first place...so if the mainland became "free" and based on republican principles, the ROC would naturally join them, figuring that they had finally prevailed in the decades long struggle.
On the other hand...they will fight being grafted into a totalitarian system which is what the CCP is now. That's the real issue. Not whether the people on Taiwan are free and independent or not...they already are. Having spent quite a bit of time over in Taiwan in the late 1990's, IMHO, if the mainland Chinese become free, the issue will settle itself naturally and tensions will reduce dramatically.