Only ignorant people think Kim Jong Il is crazy and/or insane. I have studied the man and his father at great length, and I think only a smart strategist could keep the country isolated for 50+ years.
Kim Il Sung transferred all the power to Kim Jong Il before he died, in what surmounted to the first communist dynastic power transfer in history. This was 1994, and the world assumed the people would revolt and the country would collapse. So far it's been nothing but back and forth rhetoric between North Korea (DPRK) and the US. DPRK announces they have the capability to build nukes, the US throws its weight, and DPRK blows up a few reactors in exchange for more aid. This new "crisis" is the same thing.
Add to this the current situation with the two (kidnapped?) American journalists who, in my opinion, accidentally crossed into North Korea from China without realizing it. Yes, I have heard of that happening many times before. Now they're detained in Pyongyang and will be held on trial as spies, and North Korea will use them as bargaining chips for disarming their nukes and to receive more aid.
The cycle will continue. KJI's youngest son (that they know of) is getting ready to be prepped and turned into the next God of the land.