Dongtan is not the only planned sustainable urban area planned for China. Another one is the village of Huangbaiyu, but this one is puzzling. The rendering of the original scheme shows an interesting concept, but this photo of built houses makes it look more like a standard subdivision. Some aspects of the design may indeed reduce ecological impact, but it's no model development.
The real question though, is why existing villagers are being asked to abandon their existing houses to move into new "sustainable" ones. The linked article points out that the existing villagers live scattered among their agricultural fields. Conventional wisdom may suggest that such low densities are bad as an urban model, but I would have thought that there is some wisdom in living where you work. Improving efficiencies by corralling the villagers and knocking down functional houses will only alienate them from the land. If this approach is more efficient, it is only because the fields will be consolidated and farmed by a bigger enterprise, and the villagers will have to start travelling to jobs elsewhere.
Maybe the mistakes with this village are just a bad pixel on a widescreen TV - though the villagers may have a different view - as the general approach sounds positive.
Update on 30 July 2007: I've just discovered another plan for a zero-carbon, zero-waste city, this one in Abu Dhabi. There's a curious rendering of a "solar tree" something like the fake trees that double as relay stations for cellular networks in South Africa, but this one has solar panels.