So what does this mean for the ordinary American Joe Schmoe? What kind of effects can one expect if/when China starts pricing oil contracts in yuan instead of dollars and lets the yuan float?

I don't think they're about to let the yuan float totally, soon. I'd be surprised. If they did, suddenly their output would become less attractive to Western markets. We know they want to have their economy rely more on (internal) consumerism than on the export market, that that's a long transition.