The reality of what's happening? American troops commiting war crimes is not new. Americans did some pretty horrible stuff in WWII, Korea, and especialy Vietnam. The difference this time? We're hearing about it now, not years later, plus the news spreads at a much faster rate and is much more proliferated.
Does the torture of Iraqui prisoners need to be stopped? Hell yes. But is the media again blowing it out of proportion? Hell yes again. But this is the burden we must bear in this "information age."
As for the beheading, sorry, I won't watch the video. The only way I would watch it is if it is officialy determined to be fake (then I'd be first in line to check out the awesome f/x). However, as all indications point to its authenticity, no way in hell am I gonna watch it. So I can't comment on the Mortal Kombat question.
However, my initial reaction to the news of it was that the US military needs to release a tape showing the fast, less brutal, guilotine beheadings of TEN Iraqui prisoners, including a statement saying "For every one of us you kill, we'll kill ten of you. We outpopulate you by 100 to 1." HOWEVER, what they don't tell Al-Jazera or even the American news media is, the tape is a fake, with special effects designed by someone like Tom Savini or Peter Jackson's WETA team. That bit of info only comes out years later.
But on the other hand, when you're up against forces that believe in suicide bombings, how far would that get us?