Its such a shame what's happened to Tibet in the last half-century. While I really wish there was something anyone could do about it, the only realistic option is for China to eventually work out its own internal problems. The rest of the world can't do much beyond delivering speeches and rhetoric, which China gets annoyed at but generally ignores.
I originally thought that a boycott of the Olympics wouldn't be productive, but really, I think its the only way to deliver a stern message to China. I still don't think it'll change much about Tibet or China's position on Darfur (which makes UN action impossible) or China's continued abuse of human rights. There's really not much of a way to influence China beyond threatening trade penalties, and that will not happen, especially with the North American economy going how it is right now.
What's almost lucky right now is that the opposition won the election in Taiwan a little while ago. The party that won is more pro-China, and they're not looking to antagonize the mainland. The defeated government was proposing to reapply to the UN again for sovereign status as "Taiwan", which always pisses off China and leads to posturing and military buildups. That was a powder keg that was nicely avoided.
I think that if the United States or some European countries decide to boycott, it could get the ball rolling and be a pretty massive protest against Beijing's policies without the need for military posturing or economic harm.
This is a pretty good article about how protesting the Olympics has worked in the past.
On a side note, what annoys me is that the reason the IOC gave Beijing the Olympics (over my hometown of Toronto) was to improve its world relations and to open China's doors so that human rights and social equality movements could have an impact on Chinese society. Obviously, that hasn't worked.