As you may be aware, North and South Korea are getting progressively angrier with each other over the sinking of a South Korean ship by a North Korean torpedo. The two have cut all ties, and North Korea nullified any agreement meant to prevent further escalation.
Will this end in war? I'd give it about a 10% chance. North and South Korea have rising and falling tensions over the years- North Korea does something that angers everyone, they see how far they can push the envelope, and right before everyone gets angry enough to do something nasty to them, they back off and wait for everyone to calm down before the next episode. This episode, however, has a different air to it; unlike most things North Korea has done, this particular act- the deaths of a South Korean ship by North Korean weaponry- is an indisputable act of war and is being treated as such. If anything is going to lead to war, it seems like this would do it.
The mitigating factor, though, is that just about everybody knows basically how such a war would play out, and nobody would be happy with the result or else it probably would have happened decades ago: the second hostilities commence, North Korea fires every bit of artillery they've got directly at whatever has the most people in range, with Seoul tops on the hit list. While most of the artillery could not reach Seoul, and not all of Seoul could get hit by the artillery pieces, it would be squarely in the range of the second phase: the North Korean army swarming across the border. The deaths could easily reach into the millions. After that, though, the gross disparity in technology would take over, and North Korea would be driven back without much additional trouble by just about everybody in the Western world. The only reason North Korea wasn't smashed in the Korean War was because Douglas MacArthur pushed too far, across the Yalu River, and got China involved. It's been 50 years since then, and while South Korea and the Western allies have dramatically upgraded their weaponry, North Korea is using some of the exact same weapons they used last time.
China, meanwhile, would be too busy dealing with the swarms of refugees they've been propping up North Korea for the sole purpose of avoiding. They wouldn't be interested in bailing out North Korea again.
North Korea would this time be smashed, but at a terrible cost, and afterwards there would be a massive catch-up operation by whoever wound up looking after North Korea to bring them somewhat in line with the rest of the world, something nobody is overly thrilled about having to pay for.
In any case, over at Penny Arcade, a discussion has taken place over whether the ship-sinking that caused all this anger is, or ought to be, enough to justify all that.
Whether it is is really up to you. What I can say is that wars have been started over less. Much, much less...
*In 1925, a dog belonging to a Greek soldier scurried across the border with Bulgaria. When the soldier ran after it, he was shot by a Bulgarian border guard. The League of Nations calmed Greece down, but not before over 50 people, mainly Bulgarian civilians, had been killed in response.
*In 1896, the British Royal Navy was in Zanzibar, and stopped in to watch a cricket match. The sultan of Zanzibar, however, had not been informed that the Brits were stopping by, and he was a tad paranoid as he had (illegally) claimed power the previous day. So Zanzibar declared war on Britain. 38 minutes later, the sultan's palace was a pile of rubble, his one-ship navy was on the sea floor, and he was fleeing to German East Africa (modern-day Tanzania/Burundi/Rwanda). It is the current world-record holder for shortest war. The cricket match never took place.
*When Louis VII of France returned from the Second Crusade, he had grown a beard. At the time, according to Charles Mackay's Extraordinary Popular Delusions and the Madness of Crowds, long hair was considered unholy by no less than Pope Urban II, to the point where the unshaven would be excommunicated. Louis shaved. His wife, Eleanor of Aquitaine, wanted the beard back. Louis said no. Eleanor got an annulment and married Henry II of England instead. Henry then told Louis to surrender Aquitaine to England, since according to him it should have gone to England with Eleanor. Louis said no. Cue Anglo-Franco hostilities for the next 301 years, going from 1152-1453.
Hopefully, the Koreas will be a bit more level-headed than that.