Two dead in fighting on Cambodian border this article has a summary of the background, so I'll post is here:
The background in a nutshell (taken straight from AFP on KI Media)
"The stand-off between the neighbours first flared in July after Preah Vihear was awarded World Heritage status by the UN cultural body UNESCO, angering some Thai nationalists who still claim ownership of the site.
The situation quickly escalated into a military confrontation, with up to 1,000 Cambodian and Thai troops facing off for six weeks, although both sides in August agreed to reduce troop numbers in the main disputed area.
Tensions flared again this week after failed talks on Monday aimed at cooling the months-long standoff.
Cambodian Prime Minister Hun Sen then issued an ultimatum to the Thai side after he accused more than 80 Thai soldiers of entering one of a handful of disputed areas -- telling Bangkok to leave or risk conflict.
Cambodian officials insisted that the troops did leave before the Tuesday mid-day deadline, but Sompong said they were standing their ground.The Cambodian-Thai border has never been fully demarcated, in part because it is littered with landmines left over from decades of war in Cambodia."