One thing that I don't think a lot of people know is the difficult political dynamic at work here within South Korea. The political decisions are not just weighed against the risks of further actions (and subsequent loss of life/economy etc) - they must be weighed against the "progressives".
This was a term that I absolutely despised while in Korea - it is used to describe those who are sympathetic to the Norks and basically have taken upon themselves to act as defenders of the North from the South. These groups are masters of the spin and will take any angle to resolve the North of blame and place it squarely on the (current) right-leaning government. In the past when the pinkos were in charge, the blame for pretty much every incident is shifted to the US.
These people are a minority but a very visible and vocal minority that has incredible skill in organizing and bringing people along for the ride so to speak. These people are also not all on the periphery of society - many are in politics and are a strong majority in the teachers association (yes many do teach their revisionist history/opinions in class).
So if retaliatory action is planned, the government must take the domestic protests into account - especially since the government is the GNP (right).
Quick current link - the mayor of Incheon which has control over the islands
http://www.freekorea.us/2010/11/24/m...home-to-roost/
Beef protests (to highlight how the groups can mobilize). It was a perfect opportunity for the groups to target both the US and the right-leaning party in power.
http://en.wikipedia.org/wiki/2008_US...in_South_Korea
The protests were organized and the masses whipped into a frenzy by the same people involved in almost all anti-US, anti-right etc etc protests.
There are many South Koreans who refuse to believe that the Norks sunk the Cheonan and that it was either done by their own government or the US. The buzz seems to be that many are now currently blaming it on the South because they hold military drills and that made the Norks attack. And there are some who believe that the South shot first...
More useful links:
One Free Korea - excellent information about North Korea
The Marmot's Hole - more contemporary but usually very up to date (lots of other stuff - not just politics). The writer is fluent in Korean and often translates local articles
Long post but there is a lot more going on than just weighing the Norks response to any further action.