OK, I’m operating on 7 year old physiology/biochem but here goes.
Energy metabolism can be thought of in two main branches – 3 carbon and 2 carbon sources. 3-C sources eventually can supply the 2-C pathway but not vice-versa. This is a little confusing, because many 2-C pathway members have more than 2-Cs but the body can only use 2 carbons at a time (like acetyl co-A).
Carbohydrates are the only place you can get 3-C supplies. Fats, though beta-oxidation, and protein and amino acid breakdown only supply the 2-C pathway. Your body can construct sugars (a process called gluconeogenesis, which makes sense), but the first material it needs to do so is a 3-C molecule called pyruvate. Pyruvate can also be stripped of a C and made into acetyl co-A, which is the main currency of the 2-C cycle, and an entrant into the Krebs cycle (which converts these 2 Cs into CO[sub]2[/sub] and gives a lot of energy out).
No protein or fat breakdown can be used to back construct sugars. We maintain small sugar reserves (in the form of glycogen), but these are easily depleted. After these are gone, we shift completely into 2-C. No more carbohydrates are made, and instead the energy metabolism shifts to ketones. This is very important for some organs, especially the brain, which can only use sugars or ketones.
Insulin is a hormone that signals that the body is fed. Sugars/carbohydrates are the “easy” form of energy metabolism, and normally the body looks for them to trigger insulin release. The cells see insulin, uptake sugar, shut off protein and fat breakdown (which is “harder” for the body to utilize), rebuild glycogen stores, and shuffle the rest off into energy metabolism and fat deposition. If you want to burn fat, you have to get rid of insulin (generally) so the cells think they are starving, which cause them to utilize what they got, which is fat and protein intake and stores and start ketone body metabolism. There are some other side effects as well, like natural appetite suppression and such, that occur once the body thinks it is starving, and the fact that sugars are not usually secreted in the urine but ketones are. This is the short of why Atkins works. Complications arise from the fact that proteins (made of amino acids) contain lots of nitrogen, and the body only has one way to get rid of nitrogen and that is through the kidney, so it puts work on the kidney. Also, if you ingest IIRC >25 g of carbohydrates, the body all of a sudden thinks it is not starving anymore and many people get an out-of-control rebound carbohydrate appetite. This is why you have to be so careful to watch carb intake with Atkins, and falling off the wagon hurts in a big way (and it can take up to 3 days or so to get the body onto full ketone metabolism).
To ketoacidosis. Mostly type I diabetics get ketoacidosis. These diabetics don’t make any insulin due to destruction of the islets in the pancreas. So cells have no signal to uptake glucose (even though there is plenty around), they think the body is seriously starving, and are radically shifted into protein metabolism (and sugar metabolism is totally shut down). The sugar remains in the blood, radically altering the osmolarity of the blood. There is a whole cascade of issues, many of which stem from the hyperosmolar state of the blood leading to dehydration and all kinds of electrolyte imbalances as glucose leaks into the urine and water and electrolytes follow. Acidosis comes from the high levels of the ketones in the blood, but the acidosis is usually less of an issue (although it is an issue) than the dehydration, electrolyte changes, and hyperosmolar state. Everything needs to be corrected in a gradual and deliberate fashion: fluids are given, electrolytes are watched closely, insulin is given slowly (often with glucose, as not to cause precipitous changes in the osmolarity of the blood), and usually the acidosis resolves itself as the kidneys and lungs catch up and start working again. Alcoholic ketoacidosis is similar, except it usually comes from an alcohol binge (alcohol is a 2-C molecule and therefore not a carbohydrate) coupled with malnutrition (so no 3-C molecules around) leading to a wave of ketone bodies that provide the osmoles that come from sugars in diabetes.