Kim Jong Il is missing in action at the moment. When not sporting his stunna shades and cracking jokes with the upper echelons of the army (see picture), Kim is often seen at parades thrown for him and/or North Korea. In fact, he never misses them. But for North Korea's 60th Anniversary--the biggest public show of military hardware in the country's history--he was a no-show.
Kim apparently has heart disease and diabetes, so at 66, this isn't terribly surprising. But he might be very sick, and maybe dead. Some think he's been dead since 2003, and body-doubles have been meeting with the heads of state of Russia, Korea, and China.
Either he or his replacement body-double (who, if he is meeting with heads of state, is functionally just as good as Kim himself) is in serious health trouble, and there aren't enough body doubles on hand to even make an appearance at the biggest military parade North Korea has ever thrown--something's wrong.
Now, it's one thing for heads of state to get old and die. Fidel Castro brilliantly left the mantle to his brother before anyone could object. Kim Jong Il took over (though not officially) for his father, Kim Il Sung, after the latter died. Despite this, mass suicides were still performed out of genuine grief for the leader whose entire legitimacy was based on his cult of personality.
Kim has no children, no brother, and no obvious successor. If he really is gone, and the State cannot continue to pretend that he's not, they may have a leadership crisis. Besides the mass suicides that would arise from his death, the state will have legitimacy issues to deal with. Nobody's sure how well the North Korean's are brainwashed, and whether they'll just start drinking a new guy's kool-aid right away.
Or maybe, with the Kims gone, a foreign-educated reformer might take the mantle and start changing things for the better. But don't get your hopes up.
Either way, right now China and South Korea are probably a bit worried--an unstable North Korea might mean refugee problems into highly populated areas of northeast China and northern South Korea. If Kim is dead, expect a tensing of military lines along the North Korean borders, but also an offer of aid (especially if the new leader is not so obsessed with nuclear brinksmanship).