For Chinese counter claims aside, it is not China's rise that democracies find distressing. It is the overwhelming evidence presented by China's response to the Olympic torch demonstrations that China's political opening has not only not kept pace with China's economic development but that it has not made any progress at all. Indeed, Chinese promises of liberalization at the time it was awarded the games were no more reliable than promises of tyrannies have always been.
Why would a democratic Chinese superpower be less dangerous than an autocratic one?
Because the "real enemies" of a all governments are those capable of wrestling the power from them. In democracies the "loyal opposition" is the greater threat and wars are often perceived as an unwelcome distraction.
In autocracies, domestic oppositions need to be routinely repressed and the presence of an outside enemy helps justify so doing. Hence, an autocratic super-China we are currently facing does pose a real and present danger.