I went with the third option because I generally advocate preserving the "feel" of the setting, though I'm sure most people couldn't care less.

But I suppose if the story acknowledges certain characters as being Chinese, then even if it's set in Japan it'd be better if their names alone were in the Chinese pronunciation.

I am a person that likes things as close to original as possible, so I wanted choose option 2, but...
a lot of Chinese names sounds the same to me
so I chose the first option.

We are going though Chinese history month, ok. Change them into their proper Chinese pronunciations only if the story takes place in China, i guess. I never asked myself this question but this seems logical. Have the name pronounced as the characters "realistically" would.

Mostly option 3, but I would actually pick the name that is the easiest to remember. In your example of "玉玲" is pronounced "Gyokurei" in Japanese and in Chinese, it's pronounced "Yu Ling" I would take the Chinese name, because it is easier for me to remember. But that probably has to do with the fact that I have been reading Chinese webnovels. For someone who knows nothing of how Chinese names work, they would be confusing.

I guess option 3 is the best option as that would be how the characters would call each other in the story. Still, if the story has many characters coming from one family... that is a pain. I can never remember many of their names...

This is an excellent question.

My answer is that, with a few exceptions, Chinese (or any other) names need to be translated to the proper spelling of the target language. It's very common for personal and geographic names of a neighboring country to start to significantly deviate from the original language due to both historical and phonetic reasons. Let's take Deutschland as an example, also known as Germany in English and Allemagne in French. So if you were translating a French text about Germany to English, and you kept using the term "Allemagne" instead of "Germany", even if neither has anything to do with "Deutschland", you would be considered an incompetent retard, and rightly so. Or to take another example that recently caused me to roll my eyes: http://puu.sh/tEP0T/9cc9e3337c.jpg What we have here is a mix of translator's ignorance, incompetence, and laziness.

So, to get closer to the specifics of the topic, the name 孔子 found in a Japanese text should not be translated as "Kou Shi", nor should it be translated as "Kong Zi". The correct translation is "Confucius". But other than well known figures whose spellings are historically derived, any names should be based on the current standard of transcribing Chinese names in English, which I believe is their pinyin spelling.

Now, the exceptions (there are always exceptions). The necessity of such exceptions is obviously derived from context. If we are talking about a Chinese person living in Japan who is called by the Japanese reading of their name, and the whole dialogue takes place in Japanese, it would make sense to use the Japanese pronunciation. Or, I remember watching a silly anime a while back, where there characters were Japanese, but they were named after characters from The Romance of the Three Kingdoms for whatever reason. In that case, it would also make sense to use Japanese pronunciation. You have to take it on a case by case basis.

Leave them as their Japanese pronunciations, just like the author did.
I believe this is how, it would keep it's originality. Author intended to be this way (as he/she didn't do it otherwise because of laziness or whatever reason he/she may had), so keep it how it is. Else, every other things (mainly nouns) taken other places need to be pronounced as it's origin.

Qi, Chi, Ki are all the same you see...different names on different places. Chakra is similar but not the same thing.

My question would be how many translators would know the proper Chinese translation? And how much effort would it take to find out the correct Chinese pronunciation and how to reflect pronunciation in English?

Also, for me since I don't know Chinese it really doesn't matter to me how it gets translated. If they leave the Japanese pronunciation or if they try to keep things authentic and give them the proper Chinese pronunciation, I wouldn't be able to tell the difference.

I'm with cmertb, it's all about context, if they're from China like Syaoran Li (Cardcaptor Sakura) or Kong Wenge (Ping Pong), then please use their proper Chinese pronunciations. And if they were raised in Japan and go by the Japanese reading, then do the Japanese.

I do wonder though, how often mangaka provide the Chinese reading vs the Japanese in the manga or if they provide one at all.

Quite the interesting poll this time. Can't say I really have a preference.

As long as the names are consistent, I don't really care.
The problem only arises if the series gets picked up by another group halfway through and all of the character names suddenly change.

I didn't vote because I find the question to be absurd.

I've noticed that usually in manga there is the Chinese pronunciation as okurigana on the kanzi. Usually in Japan though, people just don't know the Chinese reading and it's usually up to the Chinese person which pronunciation to use. Although I'm sure they would use the Chinese one 100% of the time when speaking with someone from a non-kanzi country in their respective language, e.g. in English. It's also worth noting that you can't always know even the pronunciation of a Japanese name unless you're told or you see the reading on a business card, etc.

As for using the Japanese reading for a Chinese name in an English translation, wouldn't that be the same as using the Japanese pronunciation on a Czech name in an English translation—to borrow an example from above posts. And that would not be either original "Praha" or the English "Prague" but "Puraha". Now wouldn't that be absurd? I think this poll is equally so.

I'm Chinese, so I'm biased, and I personally prefer the proper Chinese pronunciations regardless of the situation (as long as the character in question is ethnically Chinese, of course).

Though, honestly, most a lot of Chinese names made up by Japanese mangaka are pretty absurd. Syaoran's name, for instance, is (1) not spelled properly in any of the proper romanization practices for Chinese and (2) 小 is used in nicknames in Chinese (think the equivalent of "-chan"/"-kun"), not proper names. It is also extremely, extremely rare for a two-character Chinese surname in modern times, so unless the manga takes place in, like, ancient China, I do automatic spit-takes when I see a compound Chinese surname.

Regardless, I still prefer Chinese pronunciations (even when the name is, ugh, so wrong) because at least they're getting it, well, slightly less wrong.

This would be situational. Keeping it the way the author made it makes sense in a Japanese setting or if the name was nonsense to begin with. Otherwise, it would sound as silly as an english name that has been badly translated. Do readers really want to read or hear a Michael as Mikaru or Maikuru?