In terms of how they achieved the stalemate that /u/ofarrizzle mentioned, the key development was the Chosin Reservoir Campaign. Basically the Chinese invasion caught MacArthur totally by surprise. He had committed whole divisions in what was basically a race to the Yalu river. When the Chinese crossed they had a local numerical advantage that was close to 5-1 and basically overran the Marines who were forced to fight their way to the coast to be evacuated south.

"Breakout: The Chosin Reservoir Campaign, Korea 1950" by Martin Russ is an incredibly well written account. I've read criticism that he doesn't pay enough attention to foreign troops or the army units at Chosin, but it's a good read. For what it's worth my grandfather, who was at Chosin, said it was the only book he'd read on the subject that came close to describing what it was like.

It didn't? One would have a very difficult time arguing that anyone really "won" Korea since it ended in a somewhat-more-complicated status quo ante bellum. The main result for China was solidifying their already-rather-strong enmity of the US.