Korea and its neighbor Manchuria had been of great importance to the USSR, the PRC (People's Republic of China) and Japan since the nineteenth century. Following this tradition, after World War II the USSR made an attempt to occupy Korea. Not wanting the Soviets to grab too much territory, the US occupied the southern half of Korea, south of the 38th Parallel. Much as it had in Germany just after World War Two, these two occupations set the status quo: North Korea, that area of the Korean peninsula north of the 38th parallel became Communist, while South Korea was the province of a nationalist, anti-communist government.
The Korean War erupted on June 25, 1950 in the middle of the burgeoning Cold War, an international struggle between the US and the USSR for world domination of their competing ideologies, Democracy/Capitalism versus Communism. While the Soviet Union never got directly involved in the fighting, it did supply North Korea with weapons and supplies. The US, on the other hand, did commit its own troops as part of a UN international-peace keeping force. In reality, the UN force was in name only; the troops were made up of almost entirely American forces, with some American allies. The Korean War was the first instance that it became clear that the UN could be used by the US as a foreign policy tool.
It is somewhat surprising that only a few years after letting enormous China turn Communist without getting seriously involved, as well as watching Eastern Europe fall under the "iron curtain", the US would then become embroiled in an Asian land war over the fate of strategically insignificant Korea. The Korean War thus represented an important shift in US Cold War policy. By 1950, a loss to communism anywhere was thought of as a loss everywhere. The beginnings of the later Domino Theory were already present in an early form.
The US got involved in Korea to save face and to appear strong against communism, not because Korea was vital to American interests. Somewhat ironically, South Korea was only a sham democracy under Syngman Rhee, who was really just as tyrannical as North Korea's Kim Il-Sung. Once again, this set a Cold War pattern for the US: support of anti-communists who were quite blatantly dictators themselves, and the tautological justification of that US support for the simple reason that these dictators were anti-communist.
One of the significant results of the Korean War was that it gave the US reason to increase its military expenditure four-fold. Under Truman, military expenditure increased rapidly, laying the foundations for the so-called military industrial complex that existed throughout the Cold War. Perhaps on a more positive note, it was during the Korean War that black and white troops were first integrated in the US army, an important step on the road to civil rights. The Korean War also strengthened the US relationship with Britain, which sent troops for the UN peacekeeping force. Finally, it was during the Korean War (and partially because of it) that the Democratic monopoly of the Presidency, going back to before World War II, finally ended with the election of Eisenhower.
Another result of the Korean War was the ascendance of the People's Republic of China onto the world stage. Fighting against the US, China received aid from the Soviets, helping them to become a major military power. The US had proved the fulcrum in both World War One and World War Two, with its forces providing the force needed for its European allies to overcome its enemies. The Chinese forces, however, fought the US to a standstill, as represented by the reinstitution of the 38th parallel as the dividing line between North and South; in fighting against the US in the first war the United States entered and did not win, China established itself as a power to be reckoned with, and a communist power at that.
The Korean War also proved the tenacity and skill of the Communist Asian militaries, something that would be reaffirmed by the Vietnam War in the 1960s. In fact, remarkable similarities exist between the Korean War and the Vietnam War; from the US support of a dictatorial and corrupt anti-communist regime to its conception of communism as a monolithic entity, under which all communist nations were necessarily allies, rather than individuals to be dealt with separately. However, though those parallels, Vietnam era policy-makers did not apply the lessons of the Korean War to the Vietnam War. Rather, they did not seem to recognize those lessons as lessons at all, and repeated in the Vietnam War many of their previous mistakes.
The Korean War also showed the impact a single individual can have on history. General MacArthur's brilliant strategies, willfulness, egomania, and refusal to obey orders dramatically influenced the outcome of the war, in both positive and negative ways.
Finally, the Korean War demonstrated the new terms of the new post-WWII era, and showed how difficult it would be to fight a limited war under those terms. Although the United States attempted to keep the war on a very small scale, it quickly snowballed out of proportion, involving China, at times seeming as if it might become a World War III. Looked at another way, though, the Korean War can be considered a success: although the war did at times get out of hand, the US and the USSR were able to avoid direct confrontation, especially since the USSR fought mainly by proxy. Perhaps most importantly of all, though it was fought just five years after Hiroshima and Nagasaki were bombed, the Korean War was not an atomic war, avoiding both the possibility of immediate nuclear holocaust (since the USSR by then had its won bombs) and setting a pattern that would continue throughout the Cold War.