North Korea appears to have decided to allow its conventional forces to deteriorate. The amount of money required to rebuild the aging weapons and equipment is far more than the north can expect to extort from its neighbors or the United States. What resources that are available are going into the secret police, ballistic missiles and nuclear weapons. The North Korea leadership is intent on keeping their tyranny going, because the alternative is death at the hands of an angry population, or war crimes trails for a long list of atrocities. South Korea believes that the North Korean government will eventually undergo a "soft collapse" that the south can manage. The U.S. fears that North Korea will, in the meantime, sell missile and nuclear weapons technology to hostile nations and terrorists. South Korea doesn't care about that, and is more concerned about an uncontrolled collapse in the north.
May 18, 2006: More failed negotiations between North and South Korea, this time over fishing areas and a rail line through the DMZ. Basically, the north is looking for a bribe just because it came to the table.
May 1 7, 2006: The U.S. has given into a long time North Korean demand, and is willing to negotiate a peace treaty with the north. However, given past performance, this could take years, with the north constantly changing the terms and upping the size of the bribe it wants before signing. At that point, the north is likely to violate the treaty any time it sees an advantage in doing so. With all that in mind, the U.S. is demanding parallel nuclear disarmament negotiations. That will generate more smoke and mirrors from the north.
May 16, 2006: A journalists organization, taking a survey of how all the world's nations control their media, determined that North Korea has the most censored media in the world. In other words, North Korea is the most difficult country to get any accurate and timely information out of.
May 12, 2006: On the west coast of Japan, police are searching a North Korean ship for illegal drugs. The police say the ship is believed to have been used to smuggle illegal drugs into Japan before. Two arrests have been made. Drug smuggling is a major source of hard currency for the North Korean government.
May 1, 2006: In the last two years, U.S. troops in South Korea have declined from 37,000 to 29,500. In the next four years, those troop levels will go down to 25,000.
April 28, 2006: North Korea's admission that it kidnapped 13 Japanese, over the last three decades, for use as instructors in its espionage school, led to the revelation that over 400 South Koreans were kidnapped as well. South Korean intelligence believes that at least five of those South Korean victims are still alive in the north. The north is now willing to negotiate over the fate of "the missing" (as they insist on calling the kidnap victims.) South Korea has to decide what, and how much, to give North Korea as an incentive for the north to provide more information, or to release surviving victims.