Korsakoffs pcychosis is technically the worse, and permanent issue, resulting from Wernickes encaphalopathy.
Basically, a lack of Thiamine (Vitamin B1) leads to issues with the TCA Cycle (energy producing cycle used by cells).
There are several main signs and symptoms.
The issue it quickly resolved (if it hasn't progressed to Korsakoff's yet!!) with IV thiamine and glucose (thiamine first though).
It is linked with alcohol through two proposed mechanisms.
The first is that chronic alcohol consumption inflames the gut lining leading to a decrease in thiamine absorption.
The second it that chronic alcoholics are just plain malnourished.
It is likely a mix of both.
It is pretty rare these days, but prior to thiamine being supplemented in bread products it was thought to affect up to 5% of the Australian poplulation.
On an interesting note - once it was discovered to be affecting so many people, a Sydney doctor working in an aboriginal community who noted that the majority of the population there had signs of this condition due to poorly nutritious diets (rations), decided to do a little experiment.
He convinced to local baker to put thiamine supplement in his flour!!
The outcome was that within days, all those eating his bread (most of the community) had no more signs on the condition.
To get his method of mass cure out, he invited a journalist to come do a story on it.
The resulting headline in the paper he worked for read something to the effect of
"Doctors perform secret tests on Aborigines!"
Subsequently the baker refused to put anymore in due to the bad publicity and the community returned to normal.....
Years later the government made it compulsory that all flour be supplemented with thiamine.
Also, almost every cereal, bread, pastry, drink etc is supplemented these days.
The only group who has refused to answer the call are alcohol company.
Their studies into it showed that whilst adding thiamine had no effect on the taste or quality of the drinks, it was perceived poorly by those who did the study, and the cost was not worth it.
A shame really, but thats life.
Another interesting note is that it also causes Beri-Beri, wet and dry types.
Many of you may recognise this name as the condition many WWII soldiers had on return to australia after being POW. It was not due to alcohol, of course, but due to the absence of thiamine in white polished rice (their only real source of sustenance).
Anyway thats all from me, hope it helps