Its very interesting watching this play out here. Yeah, any mention of it on CNN or other foreign broadcasts simply gets blacked out here; and there's been almost no mention of it at all in the media.
But online...there's a frickin' firestorm! Everyone's talking about it, with sharply divided opinions. Quite a few Chinese tend to take the position that Liu is in prison, and therefore a criminal, and should not have been awarded the prize. However, as more and more people reveal info about Liu's actual 'crimes', attitudes are shifting. Perhaps most importantly, this has resulted in huge publicity about Liu's "Charter 08", which prior to this had already garnered more than 10,000 signatures. Chinese reading it for the most part cannot understand why this would constitute 'crimes against the state', and in fact support most of what he said...so it could mean a major groundswell of popular support for him.
Liu is a remarkable man. I had the opportunity to listen to him speak several years ago; he's a remarkably soft-spoken and mild man, but with iron-strong convictions. One of the things I most respect about him is his focus on principle, as opposed to people. He consistently says -- and from everything I've seen of him, sincerely believes -- that he neither hates nor is angry with the people who've imprisoned him, or with his guards. He says that they are just following the law, as it exists today...and that this demonstrates the need to change the laws.
He is actually one of the least radical of the 'leaders' from Tiananmen Square, generally taking a moderate stand that bridges the extremes of both sides (during the Tiananmen Square protests, he talked students out of violent confrontations with the Chinese military, including personally disassembling a machine gun one of the students had gotten his hands on). Some other Tiananmen Square leaders have already denounced this decision, because (ironically enough) they consider him to be too soft on the Chinese gov't. For example, "Charter 08" calls only for internal reform within the existing power structures; not for the overthrow and/or replacement of the gov't.
Its gonna' be interesting to see how this plays out in the coming days/weeks. I don't think China gives a damn about what the rest of the world thinks about Liu Xiaobo (and I doubt many other gov'ts have the guts to go toe-to-toe with China over one man); but popular support within China, and public calls for Liu's release, could be an entirely different matter.