Zergling, that's a good point, I forget how the Taiwanese figures into the equation sometimes.
Actually Chiang Kai Shek offered to send Taiwanese troops to Korea during the Korean war, but United States refused the offer, as US wanted to avoid WWIII. But secretively, Taiwan sent intelligence officers who gave assistance to allied forces in translating captured Chinese documents.
I guess you can say Kim Il Sung and Synman Rhee "won" in the sense that they were war time leaders and people's support for them were strengthened. Although, I'm not really sure about this either. Kilm Il Sung lost all the infrasture that the Japanese built in North Korea to invade China. South Korea was also a mess and Syngman Rhee had a hardtime trying to build the foundation of South Korean civil society.
I would say Soviets most defintely are the greaest winner, because the Soviets made United States bleed at China's expense. What's more, this was the first war in a long time that United States didn't win---the Soviets succeeded in showing "revolutionary comrades" around the world that "resistance against Imperialists" was possible. This result cost Soviets couple tanks and couple planes, but the Chinese lost many lives. The ideological conflict between US and USSR was going to happen anyway.
The worst part of this debacle was that the war ended in exactly the same place where the war began. With better diplomacy, a war between United States and China could have been avoided... But I suppose you are right about one thing. If China and US agreed to the matter, then China probably would have succeeded in taking over Taiwan, so I guess modern Taiwanese are better off.
But in the end, Korea is much more important to China's security interest than Taiwan. Historically, China-Korean alliance was a big factor in keeping the Mongols/Jurchens/Japanese in check. Formosa in Dutch hands, really didn't threaten mainland China... From the Mao Ze Dong's point of view, if United States had aggressive intentions towards mainland China, then his decision to go to war in Korea and let Taiwan be... this was the correct decision. Although, personally, I think Mao Ze Dong miscalculated due to his ideology. United States in 1950 was sick of wars and was not in the mood to support Chiang Kai Shek steamroll into China. The fact that United States didn't provide Korea with any tanks and airforce should have been proof enough, but in the end Mao was a communist who fought hard to unify China, and the very thought of losing it... I guess that's the decision he made. The worst part of all this, is that the People's Republic of China today is not really communist anymore. Just like the Vietnam war, in hindsight, both were stupid wars that should not have happened.
I wrote some things before that the supermod deleted out. I don't think I said anything to inflammatory, but I'm not chinese and I am a guest of sinodefence so I'll abide by the standard of this forum. However, I rarely see Chinese people discuss this war, let alone make the claim that this war could have been avoided. At best, I only see people rationalizing China's involvement as a way to defend China from US aggression.
One important point that I want to stress to Chinese readers is that this war also have a heavy cost in terms of Korean perception of the Chinese, which is rarely talked about by the Chinese. Historically, Korea was a vassel country of China. In fact, when the Ming dynasty fell and Qing dynasty took over, Josun intellectual elites claimed that Korea was now the only civilization that was preserving Chinese culture. Modern day Koreans are suspicious of China's imperialistic ambitions. A lot of Chinese young people are just as jingoistic as Korean young people. Except the difference is that the Chinese see themselves as someone who had glorious past and is seeking to restore that greatness. That in itself is ok, but sometimes that might lead people to assume that China is looking to establish a new vessel relationship with Korea.
In looking back, PRC has chosen the wrong side in terms of "winning the hearts and minds" of Koreans. Two main reasons: 1: Population of South Korea is much larger than population of North Korea. 2: North Korea by its national ideology is unwilling to tell their people that China "saved them". The net result is that for most Koreans, China is seen as a meddler. You can say the same thing about the United States, but from the Korean point of view, only the North Koreans will see United States as meddlers. And since the Kim Il Sung regime is so horrible, it's quite possible that in the future, the people of North Korea could be even more pro-America than South Korea.
Economics have driven both countries to what I believe to be the "natural" order of things--which is to say a peaceful Sino-Korean relations. But there are still a lot of work that needs to be done. If Korea ever unifies, the remaining government certainly won't be communist. Old communist Chinese people might still favor DPRK and think that they are important buffer against United States. This really is a foolish way of looking at things. There are a lot of suspicians amongst Koreans that the Chinese are the greatest impediment to Korean unification. If Koreans continue to see things in that light, and when Korea gets unified, the border between Korea and China could become heavily militarized--with US presence. To prevent this from occurring, China must have a strong active diplomatic relations with South Korea.