It's my understanding that plutonium is relatively easy to make (with a nuclear reactor), but the engineering design of a plutonium-based atomic bomb is quite difficult. In contrast, enriched uranium is hard (or at least time-consuming) to make, but it's said to be relatively simple to design a uranium-based atomic bomb.
The bomb that the U.S. dropped on Hiroshima used enriched uranium. The design was considered so straightforward, and the enriched uranium was so time-consuming to produce, that no test bomb was exploded first. The bomb that was dropped on Nagasaki, on the other hand, was plutonium-based; this design was tested (at Alamogordo) before being used.
I don't know, but I would guess on general principles that the uranium approach would be the one that a country like Iraq would pick, if it had to do the design from scratch. After all, they can probably acquire enriched uranium through some means, and the bomb design is simple. With plutonium, the design is complex, and they would probably worry that, once they conducted a test, they wouldn't have the opportunity to build any production bombs, because of U.S. reaction to the test.
On the other hand, North Korea is apparently using plutonium in its design. Maybe they figure that the world geopolitical situation will protect them even if they conduct a test. Or maybe they have obtained a working plutonium bomb design that they trust (from China?).
If Iraq could obtain a tested design, plutonium might be the way they would choose to go.
I heard multiple reports tonight that they have found Cobalt 60 as well for making the ultimate dirty bomb.
One such bomb would eliminate Israel or the Saudi oil fields.
One such bomb would not eliminate Israel; it would contaminate part of one Israeli city. The attacker, on the other hand, would be eliminated by the Israeli response.