KATUSA stands for Korean Augmentation To the United States Army. Because service in the armed forces is mandatory in The Republic of Korea for all male citizens, many Korean men who have learned to speak english compete to become KATUSAs so they can serve thier time in a unit in the United States Army rather than in the Republic of Korea army. It's widely known in Korea that the U.S. military is generally less strict than the Korean military, and allows for more personal freedom.
The purpose of the KATUSA program, in general, is to allow the U.S. military to have soldiers that speak Korean in order to allow them to function and manuver throuought the Korean peninsula with a lesser degree of difficulty. They not only serve a great purpose as translators between the local populace and economy and the U.S. Army, but also serve to help the U.S. manuver around in an unfamiliar terrain, and often (though informally) help U.S. soldiers new to the peninsula understand Korean ways, customs, and a bit of the language.
The KATUSA program began in July of 1950, during the actual Korean War.