First, the interests of the US and the ROK are no longer congruent. The ROK cares mostly about not getting invaded or overrun with refugees, and the US cares about nuclear exports. The DPRK has allowed itself to be bought off by the ROK via the special economic zones, limited trade and the like in exchange for an implied promise not to invade, and so the ROK policy is now to urge restraint on the US. Meanwhile, it is clear that the DPRK cannot be bought off by the US on nuclear exports, because of the Clinton experience.
It also appears that the DPRK is gambling on the Chinese model - economic reform in a few special zones plus continued tight political control - as a way to stay in power. The chances of it working are probably less than 50/50 (especially if reports about the refugee tide across the Yalu are true), but it's the best shot they have. By providing the ROK and the PRC with opportunities to make money they have neutralized them even further as US partners. I suspect the Chinese are quite willing to string the DPRK along as is, and are not that concerned about nuclear exports to the jihad crowd. In fact, they may actually desire it. The ongoing efforts to throw Kim Jong-Il under the bus are probably part of this effort to make the DPRK regime more stable.
I don't know much about such matters, but it appears to me that the best play for the US has is to encourage a rapid overthrow of the DPRK regime via some sort of uprising. But that's easier said than done.
There has always been a minority view in Western intelligence that North Korea is engaged in a great bluff. In this scenario, Kim Jong-Il is behaving like Saddam Hussein - deriving status and power from the aura of weapons of mass destruction.
However, no one can be confident in this analysis.
They can, however, scream "Bush Lied, People Died" in hindsight if it does turn out to be a bluff. To be on the left is never to be wrong.