The best defense is attack but that would risk retaliatory capital bombardment by the North which in return would necessitate equal bombardment of the North's capital(not that they have much).
The thing is the Cheonan may be sunk by the North but the South's population is not at risk with the North raising the concern whether military retaliatory action would be worth the risk of putting the entire South's population into a war situation.
It would be different had the attack in the first place targeted civilian population or infrastructure. That would probably justify an attack on the North immediately.
So the South is facing a dilemma that if they responded too soft the North and their own population would think the government as being too weak both not advantageous for the return of the North's nuclear talk while at the other spectrum if the South responded too hard they would risk Seoul bombardment which would be putting many many more South population into catastrophe.
So it's best to wait for Kim Jong Il regime to launch a couple of his big rockets over into South Korea before launching an all out attack on the North. If that happened I believe the South would have no choice but to attack the source of their threats in North Korea.
