Chinese IDN .中国 (puny: .xn--fiqs8s) is live since 8/15. Internet Explorer and Safari (tried on my iphone) support it natively. But in non-localized Firefox and Chrome, it display Punycode instead of unicode characters.
For example, the domain http://你我他。中国 will be displayed as http://xn--8mqxmp29b.xn--fiqs8s/ in Firefox and Chrome.
To fix it, do this in Chrome: In Tools(the wrench)->Options->Under the Hood tab, under "Web Content", click "Change Font and Language settings" button, then select "Languages" tab, click the Add button to add the language Chinese.
For Firefox, someone already filed a bug report, so hopefully it will be fixed in future release soon. But for now, we need to add the Chinese IDN to the whitelist. Type "about:config" in the address bar, click "I'll be careful, I promise!" button, right click, select New->Boolean, enter "network.IDN.whitelist.xn--fiqs8s", click OK, then select "true".
Now you can type Chinese IDN domain name in the address bar, it will be displayed as is and will not be converted to Punycode. In fact, if you type punycode, it will be convert back to IDN.