Wow man, now you are treading on one of the most complex openings around. If you are serious, have a look at some Bronstein games or so. The game you post does not look a kings indian game to me.
Whats the benefit of a kings indian?

The kings indian is entiely respectable, and a theoretically strong system.
(from my experience as white in several variations against it)
The benefits of it over others are:
>can be used against 1.d4, 1.c4, 1.nf3 and is possibly the biggest challenge to the d4 deviation systems such as the london.
>lots o good players have used it so there is plenty of material.
>your opponent can't prevnt you rom entering the system>
>its fairly 'systematic' in a large portion of the variations. The ideas and manuevers are often extremely similar.
>White really needs to know hes stuff, since there are many move order and nuances in which white must change his plan completely. (very much so in the fianchetto variation)
the game was just an illustration to show what i mean about how when you fianchetto, followed by knigh to cf6 or c3, followed by 0-0, you usually walk right into a trap.
you say its risky but how exactly is it risky, what sorts of themes and strategies can be utilised to make a kings indian into an effective weapon?

Dawud. An experienced KID player is a combinatorial animal that will push f7-f5 and crush you on the kingside with an avalange of pawns behind which he puts all his pieces that come and fry you with your eyes wide open.
but how could he cause an avalanche of kingside pawns if his king is castled kingside? isn't that sort of exposing his own king? do you have any example games?

Yes a KID player will go after you with his pawns, his pieces and even with his king on the kingside. No seriously. Look at the games here on the site, read bronstein on the kid, look at chessgames.com, ... I am not the postman :-)

You can start with one of Fischer's games:
http://www.chessgames.com/perl/chessgame?gid=1044673
Bronstein's games are also worth looking at:
http://www.chessgames.com/perl/chessgame?gid=1033635

That's not the Kings Indian and neither player of that game knows how to play it. Also a 2 min game is no serious test of theory.
The threat with the bishop vaguely resembles the Averbakh. If black plays it properly with d6, Nf6 and c5, it generates enough play. The trick with Bh6 and h4 is naive and only works on people the first time.

What? Really? Thats not a King's indian; not even close. What black played was a very poor variation of the Robatsch defense (1... g6).

White: To try to destroy black with a massive center
Black: To build up positionally and strike the center with e5
White: To try to destroy black with a massive center
Black: To build up positionally and strike the center with e5
So white's attack on the queenside and black's attack on the kingside are to hide those "real" plans?

Uh... lets just get this out of the way:
1. What OP played against wasn't a King's Indian.
2. There is no "one" plan for the King's Indian. Its entirely dependant on the variation that is played.
3. http://www.chessgames.com/perl/chessplayer?pid=49796 Radjabov I believe is currently the strongest player who employs the King's Indian (Although I can't remember if Nakamura does so also in long games). Look at some of his games if you are interested.
4. The most usual starting set-up for a King's Indian is: 1. d4 Nf6 2. c4 g6 3. Nc3 Bg7 4. e4 d6

The e6 g6 combo right away is a real loser. The attack you played is common in the pirc, so you're probably thinking of that, not the KID. To stop it is not a simple 1 sentence answer, but for example the ubiquitous Nf6 instead of the odd looking Ne7 guards h5 so you can't play the attack instantly.
Nf6 also allows black a playable line (which used to be the main line) after Be3 he plays Ng4 and a little dance ensues... Bg5 h6 Bh4 g5 Bg3 e5.
I think main line today involves c6 instead. Black expands on the queenside with b5. Often this can hit before white gets that attack going e.g. Qa5 and b4. It's not "sneaky" to wait with the attack because if black gets developed it will be a lot harder to make it work.
As others said, the kings indian defense is different. Maybe biggest clue is white has a pawn on c4. In it black attacks the kingside like mad (lots of spectacular sacrifices are seen out of these games) while white goes for the queenside. That's the classical variation anyway. Some lines sees white castle queenside and end up under pressure there. Some lines white fianchettos kingside and black doesn't have much attacking chance there anymore.

Well anyway he attacked this particular setup the way he was supposed to so it's not that big a deal if he got the opening name wrong.
Personally I'd just play 7.h4 and get on with it. Black can't do anything about this anyway.
If you like this sort of thing I would recommend 5.Be2 followed by 6.h4 or 6.g4 in the regular king's indian. It's not going to give you an advantage but it requires Black to be able to handle the space disadvantage with something other than usual KID manouvers which frankly they aren't always up to.
He can play h5 So may want to throw in g4 first, then go for h4... kind of like the keres attack out of the schevenigen.
http://www.chess.com/livechess/game?id=358774518
I almost feel a sense of glee whenever I face a kings indian now (bare in mind this was a 2minute game so maybe some mistakes are there). I rarely lose and almost try to delay the Be3 Qd2 0-0-0 combination just so my opponent doesnt know what I will do until he commits to castling kingside.
My question is, what exactly is the person playing a kings indian supposed to gain from it? What themes and strategy can lead to a win? What things should they aim to achieve with the kings indian?
Does anyone have any Grandmaster games highlighting how to win utilising the basic strategies and themes for this opening?