This is a difficult question to answer, but I'll give it my best.
Due to the extremely large variety of Chinese martial arts, much of what I am going to say will not apply across the board.
Many traditionally run schools can have a very laxidasical atmosphere. I have heard similar descriptions about schools run by fairly famous, old-school teachers here in San Francisco. The focus is on forms training, but also with developing application from the forms. When you watch one of these traditional schools, you see that everyone is working on their own thing, or working in small groups. The sifu wanders around and gives some corrections here and there, and offers some new material to students he feels are ready for it. In this environment, there is seldom a cohesive "full class workout" with the entire group training together. Basically, you need to be very motivated for your own training, because nobody is going to motivate on your behalf. If you want to learn and train hard, you will learn a lot. If you lack motivation and stand around and don't train, you will get little attention from the sifu. If he sees you are dedicated and working hard he will give you a lot, but it may take a while for him to be satisfied that you are really serious.
My sifu says that when he learned Tibetan White Crane from his uncle, his uncle would show him a couple moves from the form and then go read the paper for an hour. Then he would come back, check on his progress, make corrections, maybe show him a little more, and then go read the paper again.
For many Westerners, this can be a frustrating way to learn. There is less structure than we are used to in a learning environment. Some schools, especially with younger teachers, are running classes in a more cohesive way. I think they are catching on that our short attention span society is having a hard time learning in the old way and they are trying to modernize the approach a bit. For many Westerners, this is an easier way to learn and is more successful on a business level.
In my opinion, I think the modern way CAN lead to a dependence on an instructor who always tells you and shows you what to do. The older way, for those who can thrive in this environment, leads to more independent martial artists who have learned and internalized the art, made it their own and "take" the art with them. It is not simply something to be practiced in the school and then left behind when you go home. I have seen people who have trained for years in a modern-minded school, who are at a loss to try and practice by themselves. They just don't know how to approach it, or how to make their own workout effective. Sometimes these same people teach class when the head instructor is away, and the class is usually poorly run.
As far as training methods, this can vary a lot from style to style. You will definitely see Forms practice and some kind of technique application, but may also see striking sandbags, makiwara, heavy bags, palm training, wooden dummy, weapons training and various other methods.
A school may not even be in a formal setting. It might be in a park, or at the sifu's house, or in a YMCA or something.
So how do you know if what you are seeing is a "Good" School?
First of all, be honest with yourself. Decide what kind of learning environment you will thrive in. Would you do better in a Traditional or Modern training environment? This will help you eliminate schools from the outset, that teach the way you don't like.
From there, watch the students. If they are focused in their training and seem to be working hard and developing good technique and application, then you are probably looking at a good school. If everyone is standing around and not working very hard but are talking and joking a lot instead, probably a poor school.
talk to the students. See how they feel about the school. Why do they like the school?
I know this is fairly nebulous, but it is a very difficult question to answer. A poor school for one might be a gold mine for another. Get in, check it out, think about what you see, try it out, if it isn't right for you then go somewhere else.
