KTV stands for Karaoke TV and there are many different types. Basically, people go there to sing, enjoy themselves, drink, and often hook up with someone.
Some of the KTVs have a big main hall with many people singing, both men and women patrons. These will have little action unless you just happen to "click" with someone. The others have some form of sex business going on and the places come in a variety of price levels and sophistication.
On the low end of the scale, you can get a small room for an hour or so, and choose a girl to accompany you. While in the room, you can sing or simply play the music while you feel each other up. In this type of KTV, may have sex in the room with her (be sure to lock the door). Just having her there with you singing, drinking, etc, can cost between 50-100rmb. Having sex, you can be sure to add at least another 100-200rmb.
In the high end club, the rooms are decorated very nicely, the girls are prettier, but of course everything costs more. The tip for the girl just to sit with you can be as high as 300 rmb and taking her home or hotel (sex in room seldom allowed), may cost as much as 800rmb, depending on which city you are, etc. These places often have Chinese businessmen taking their clients to drink XO, sit with a girl and maybe have a little feelly-feelly, but not much else. These guys often drop 3000-5000rmb for a couple of hours in a room for 6 guys and the girls sitting with them. Ah, the cost of doing business in China.