It looks like Russia and Georgia are at war, for all intents and purposes. James Joyner has a pretty good run-down of the crisis. (h/t Balloon Juice).
Most people don't even know where Georgia is, but the region around the Caucasus is a frequent flashpoint between Russia, the former Soviet republics of the region, and various rebel groups that still want to break away from the former or the latter. Georgia is a particularly thorny case, being a former Soviet republic with rebel groups within its borders as well as Russian "peacekeepers" obstensibly there to mediate between the two sides. What happened today, as Georgian forces attacked rebels in South Ossetia, has both sides claiming the moral high ground, Georgia describing it as an unprovoked Russian attack on its populace, and Russia claiming they are only acting to defend Russian citizens in S. Ossetia (of which there are many).
The subtext to all of this is that Georgia was trying very hard to become a NATO member. Now it will never happen. Why? Because the whole idea of NATO is that if one member state is attacked, all other member states must come to its defense. But as long as Georgia has uneasy relations with its northern neighbor, NATO won't risk getting drawn into a conflict with Russia, and thus won't risk allowing them to join. Putin, who still sees NATO as an anti-Russian alliance, surely knows this.