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In fact, a troop buildup that large would tip off North Korea to start defending the border, and would be a logistical nightmare. ... They won't need a whole lot if they decide to take Pyongyang.

Large buildup or small, North Korea doesn't have the resources to defend their western border and the DMZ. The troops in place on the west are mostly to stop people from leaving. Were the Chinese so inclined, they could push through the border and make it deep into North Korea before running into any significant resistance. If they are able to convince a few key commanders not to oppose them, they could make it close to Pyongyang in short order.

There are a number of reasons why this might be desirable for both sides. Most likely would be the imminent collapse of the government. The leadership of the DPRK could flee to China, and the PRC wouldn't have to risk Korea being unified by the ROK/USFK military.

"Large buildup or small, North Korea doesn't have the resources to defend their western border and the DMZ."

If the North Koreans felt an imminent threat from China (such as they would if they saw a massive troop buildup), they could very well start recalling troops and equipment back from the DMZ. They know the US is in no shape to launch an invasion against such a heavily defended border, and the know that the South Koreans wouldn't allow it anyway. The South Koreans understand all too well that war with the US means that Seoul will be obliterated by artillery and missiles from North Korea, which means that they'll hold back the US unless they have no other choice. North Korea could probably divert up to 90% of its military forces to the defense of Pyongyang, making the whole thing a major pain in the rear for China, who would then have to bring a bunch more troops and equipment in. I can certainly see China simply lining up a ton of artillery and just shelling the hell out of Pyongyang and all the troops defending it, so it's still a losing strategy for North Korea in the end.

"The leadership of the DPRK could flee to China"

That's an interesting possibility, but one has to consider whether Kim Jong-il's ego will allow him to give up all the power he has right now and flee like a coward. That's sort of like asking a track star who's breaking world records to retire. If they could get Kim Jong-il to agree, it would still look good for China, though not as good as a military invasion, and would have the same benefits of removing the nuclear threat while getting rid of the US forces on its doorstep.