Kaesong is a small city and former capital of Koryo Dynasty (918 A.D. - 1392 A.D.). It is the only major city that changed hands between North and South Korea after the Korean War.
Kaesong is connected to Pyongyang by highway, about two and a half hours away. It is now (2007) connected to South Korea via road and rail through the DMZ, although these routes are not open freely but only to business, diplomatic and group tour traffic.
Ancient temples and Koryo rulers' tombs.
Souvenirs such as ginseng, DPRK stamps, books written by Kim Il Sung and Kim Jung Il, and Korean handicrafts are available, and not expensive. Such stores accept US dollar, Euro and Chinese Yuan.
The majority of visitors are placed in the Kaesong Folk Hotel, which comprises traditional Korean houses and courtyards converted into a hotel. It has a small souvenir shop and restaurant. If you're not part of a tour group you might have the hotel all to yourself. It is located just a few blocks away from the Nam Gate.