A lot of the points about North Korea actually using a nuclear weapon on a neighboring state are rendered largely moot by the fact that, at their current levels, it'll take several years' worth of research to master the miniaturization techniques required to mount an effective warhead on a ballistic missile. I'm also fairly certain that any attempt to deliver a crude Little-Boy-esque device via bomber (does NK even have any bombers with that sort of capability?) could be easily detected and neutralized. The same scenario would most likely hold true for any sort of ground invasion of the country, provided the invading forces didn't just decide to waltz up to some sort of ground-based apparatus.
Now, that having been said, I'm of the opinion that the world shouldn't twiddle its thumbs until NK does possess that capability before taking some sort of decisive action or other. Whether it's via intense international pressure finally having some sort of effect, Kim Jong-il finally croaking, or the least desirable option of military action, preventing a state like that from being able to severely threaten its neighbors is imperative.