Kim Jon Ill might be a dictator, but I don't think he is a fool (mabe.... we'll see). I think he knows that if he uses a nuke on one of our allies, or worse, if he manages to get one to California or Alaska (the only places within North Korea's range), he knows North Korea is history. Done. Vanished from the map. If they seriously use one of their nuclear weapons, he won't be alive to see the results. Once anyone for that matter uses a nuke that opens the door. Don't forget, most of these countries have one or at most six nuclear weapons. The United States has 145 that we know of, and probably a few more we don't. So once they launch one, they just committed suicide for their entire country. That's the counter ballance. If they hit L.A., we loose a city. Their entire country is wiped out. That's the counter ballance. In the game of chess, we just have more rooks than anyone else!
I do think diplomacy will prevail. Negotiating is the only way to avoid this scenario. I don't think we will attack them unless we are provoked in some serious fashion. But at the same time we are applying pressure to keep them from doing something so foolish. The ball is in Ill's court right now.