Noah Shactman takes a look at the recent (and long running) war exercises we conduct with the South Koreans, although I think he mischaracterizes them. They are not a mock attack on the North, but a response to an invasion. They do take on a larger sense of urgency when the enemy being trained for detonates a successful nuclear device. I spent a goodly portion of my time focused on and working in South Korea, and actually served in a Captain's slot as an Area Specialist Officer focused on the peninsula for a year.
The big fear, prior to Nork nukes, was the vast size of their military. Their ability to throw huge numbers of men and machines at the border and the artillery pieces that can hit Seoul create a scenario where they could overwhelm the South and us. We don't have enough troops in country to be much more than a trip wire and all plans count on sending half a million or so US reinforcements to hold the line. There is a legitimate point to make about whether we could get anywhere near that many troops there given current ops.
North Korea has a long history of creating crises then cashing in on them to keep their non-functional state afloat. This is a classic example of that exacerbated by succession concerns for an increasingly creaky Kim Jong-Il. The fact that they are considered the main potential nuclear proliferation supplier and that they have worked with the Iranians in the past makes this more dangerous than the usual shakedown. In the past the threats to invade the South were fairly hollow due to the dilapidated state of their military gear, and a serious lack of ammo and gas to make it happen. That has only gotten worse and their ability to invade in any meaningful fashion is seriously questionable.
Their ability to sell nuke technology to the Iranians or someone else is a lot more frightening now. It forces a change of strategy to blocking the export of this and points out the absolute failure of every diplomatic effort. They are angling for a pay out in food, oil and money, and have moved up from bribery to outright blackmail. Paying them has done no good before and although the population will suffer, they should not be rewarded. This is the only club we have and we must force them to stop their outrageous actions. This could get uglier before it gets better.