Kim Jung Il's off on the same despotic masturbatory fantasy that brought down Manuel Noriega and Saddam Hussein. "Look, I so powerful I can take on U.S.!!!" So, let's take away his girlie magazine and practice "quiet diplomacy."
I'd like to see China and Russia handle N. Korea. I'd be putting my diplomatic efforts into persuading those two countries that they have the most to lose from a nuclear armed lunatic in the region, and giving them behind the scenes incentives to tame the beastie.
Ideally they could threaten/promise away till he either a) dies, b) gets killed, c) is overthrown, d) backs off.
The worst case scenario there, though, is they decide to do it by invading and trying to own the Korean Peninsula. Then we might have to intervene before they started a war. (Fortunately they didn't interfere that way with us and Iraq.) Hopefully by negotiating with China and Russia behind the scenes we could exert some control/influence over how they handled their attempts to control Kimmie boy.