Hi Isquare - I did the same thing you are doing. My one August 3 night stay at the Prague IC certainly was worth the $200 spent on Ambassador membership. I booked a King Bed Deluxe Room and was upgraded to Junior Suite. Over 3 nights, it would of been a roughly $400 difference if I was not Ambassador. I do recommend you contact a manager at the IC Hangzhou prior to your arrival to ensure your benefits. Let her or him know you are new to Ambassador and I am sure you will be taken care of well.
As far as the free night, I have yet to take advantage of mine. You must book the IC rate for the other weekend night. That IC rate varies to the property, so I am waiting it out before I use my free night.
Enjoy Platinum Elite status with other IHG properties and sign up for the promotions. They tend to give out non-elite points like candy. That being said, I tend to use Marriott a lot more (titanium status).
Good luck!