The Qin Dynasty is important because it represents the shift from the feudal system of Zhou kings into a centralized bureaucratic government for the first time in Chinese history. This particular aspect of Chinese history (unification) has been a very important theme for Chinese people.

The Qin legalist tradition was brutal (and has a bad rap in Chinese history for its treatment of Confucian scholars) but highly effective. In just 15 years, the Qin government standardized weights and measures, coinage, written script, and even the axle width on carts. Even though the Qin empire lasted for an incredibly brief period, it laid the foundation for imperial bureaucracy in China and the rise of the Western Han in 202 B.C.E.

Why didn't Chinese civilization just re-collapse into smaller states again almost immediately

It actually did collapse, into 18 separate states. Widespread rebellion against Qin rule led to power struggles between warlords and rebel leaders. Liu Bang successfully led a campaign against a rival leader, Xiang Yu, and became the first emperor of the Han Dynasty. Lacking the power to control all of the territories of the Qin, he instead opted to allow the eastern portion of the empire to remain somewhat self-sufficient. It is for this reason that study of the Han dynasty is separated into 'Western Han' and 'Eastern Han'.

Edit: I was trying to make my answer to the question very brief here and in doing so didn't do justice to the formation of the Han empire. I was not trying to say that the Western Han and the Eastern Han existed simultaneously, or that Liu Bang was solely responsible for the way in which these systems developed. For a much more detailed and accurate history on the formation of the Han empire please refer to /u/cthulhushrugged's comment below mine.

As to why the Qin reforms stuck, it did not make sense to make changes to already very pragmatic and useful policies such as standardization. The only significant reforms that were rejected by the Han was the treatment of Confucianism and its relationship with the state.

The timeline before Qin Shi Huang can accurately date back to the start of the Shang dynasty. While there are archeological records of neolithic societies in China, little is known about them.

TheNerdView pretty much listed out all the important things the Qin did, so I'll just add a little conclusion.

The reason Liu Bang kept the reforms, and the reason Qin was so influential, is because those things worked. The system of government and administration Qin created became the basis of pretty much all administration of Imperial China afterwards. While it continued to evolve, Qin influence is clear. Many a scholar throughout the ages quipped that for all their Confucian rhetoric, China was basically Legalist. Until modern times no one seem to have tore it all down to try another completely different system.

As for why the Han didn't collapse immediately, one can only say because the Liu's weren't that unlucky, and succession was smooth (relatively speaking). And Liu Bang had the sense to keep a peaceful foreign policy after getting his ass kicked by the Xiongnu, so he can crush internal rebellions and set up his own family members as rulers of the ex-rebel territories. His dynasty was given the chance to entrench, when Qin did not. Now that's not to say China didn't collapse into chaos and break up from time to time. It definitely did, though traditional scholars like to pretend it didn't.

Everything before Xia is clearly mythological. The existence of the Xia dynasty is disputed. Archeology says "something" exist (whether it's the Xia remains to be seen). Shang is usually the more widely accepted start for Chinese history (and civilization) proper, as a clear bronze age civilization that left behind lots of sites, artifacts, and the clearest examples of early writing.

Why Qin is so important and hard for later dynasties to surpass? As a Chinese, my answer is that the first united dynasty and the first emperor set a set of standards.

1. He chose 皇帝 as the title of China's ruler. For he thought that what he had done was totally over the three 皇s and five 帝s of ancient of ancient times.

2. He established the state-and-county system. The whole country was divided into about 40 states and each state accordingly several counties. Notice the central government only sent officials to state and county level, and paid them by using government income. The lower social stuctures, such as villages, were governed by themselves or local fames, receiving no money from central fiscal. And this is called by historians 'the emperor's authority do not touch lower than county.' This arrangement is followed by next 2000 years, for you can imagine that any ideas to enlarge official numbers will be a disaster to an agricultural country.

3. He introduced the central government of 'three primes, nine departments'. The three primes are: a) prime minister; b) grand procurator, who supervised officials; c) grand general, which was in charge of military. The nine departments contained law, palace security, foreign affairs, finance, royal family affairs, etc.

4. He issued the law of uni-Chinese characters and uni-gage. In this country, people from different areas had different accents but they could still communicate and share the same ideas, because Chinese characters work well by their meaning and less by pronunciation. The standard uni-gage system could promote economic development and guarentee government's income(in less commercial times, money was short and farmers paid tax by handing in their crops according to gage).

5. He conquered Guangdong and Guangxi in south China. Yeah, we Chinese are this kind of aggressive. Basically, Chinese would eat all the adjacent agricultural land into its system. Lucky for Japan and southeast Asia, which are remote. To conquer Guangdong and Guangxi, he ordered to dig Lingqu canal to connect Changjiang and Zhujiang rivers. Remember that was 2000 years ago before Suez and Panama.

So, you can understand how foolish were U.S. president and Wallstreet to let China enter WTO. It is a nation who at 2000 years ago realised the importance of establishing uni-standardization and political institution, and digged a canal for military purpose. And the great president opened a door for Chinese.

you can see wiki's explanation: http://en.wikipedia.org/wiki/Qin_dynasty http://en.wikipedia.org/wiki/Lingqu_Canal