The "First" Ironclad
Unbeknownst to many, the well renowned stand off between the Monitor and the Merrimack was by no means the first instance of ironclad use in maritime combat. The French navy's development and use of ironclad warships during the Crimean War predated the Civil War ironclads by almost a decade. The first recorded use of ironclads in actual combat in the West came in 1855, when the French navy deployed a fleet of ships accompanied by several armor plated boats fitted with cannons to lay waste to the Russian stronghold at Kinburn on the coast of the Black Sea. Granted, these ironclads (considered "floating batteries" rather than actual ships) were rather primitive in design, the sheer amount of damage they could sustain was unheard of at the time and would prove to change the face of naval warfare the world over. The French navy further improved on their invention to develop the formidable steam powered ironclad La Gloire in 1859, which is regarded as the first "actual" ironclad... At least in Western history.

Ironclads in the Far East
Of course, why stop there? If you go back even further in history, you'll find that the first ironclad warships were actually used in East Asia circa the late 16th century, in both Korea and feudal Japan to be specific (disclaimer: while these ships were the first to use iron as protection against light artillery and to prevent boarding attacks, it is important to note that these ships were not completely clad in iron, so to speak). As to which country the distinction goes to for inventing the world's first armored ship, it is hard to say since this is often the subject of much heated debate.

Nobunaga's "Iron" Ship(s)
The year was 1576: feudal lord Oda Nobunaga, who had just dispatched of the remnants of the once powerful Takeda army, was only a few steps away from realizing his megalomaniacal vision of unifying/dominating the Japanese archipelago. The few threats remaining included the steadfast forces of the Mori family and Nobunaga's arch nemesis, the Buddhist Honganji clan. In order to deplete the hostile forces at the Ishiyama Honganji temple in Osaka, Nobunaga went to great lengths to install a naval blockade to prevent their allies from delivering supplies and provisions. The Mori faction, sensing (correctly) that they would probably be next, sent a fleet of more than 600 ships down the Kizu river to destroy the blockade. Nobunaga's blockade, while being overseen by naval genius and former pirate Kuki Yoshitaka, was heavily outnumbered and suffered a humiliating defeat due in most part to a relentless barrage of exploding arrows. Taking this lesson to heart, Nobunaga commissioned Kuki "to build a ship that won't burn this time" (or something to that effect). Over the next two years, Kuki would produce a total of six "ironclad" ships, including the famous "ironclad" behemoth, the Ki-Shuku Maru which was over 150 feet from stem to stern (massive for that time period), three stories high, outfitted with three "cannons", multiple portholes for muskets and other missile weapons, and powered by 100 or so laborers (the words "ironclad" and "cannons" have been placed in quotes for reasons which I'll address later). Kuki and the Moris (plural) would meet again on the Kizu river in November of the same year, only this time the Moris' exploding arrow tactic was rendered useless, and Kuki managed to recapture control of the Osaka harbor. Two years later, cut off from their supply lines, Honganji temple was eventually overrun by Nobunaga's forces in dramatic fashion. Kuki was handsomely rewarded for his heroics, as well as his ingenuity, and Nobunaga dubbed the Ki-Shuku Maru, the "Nippon-Maru" as in, the number one warship in all of Nippon. This story would later be recounted many times, and the legend of Nobunaga's "Tetsu-Bune" or "Iron Ships" became a testament to Nobunaga's "unparalleled" greatness.

Yi Sung-Shin's Turtle Ships
Fast forward more than a decade: Nobunaga has succumbed at the Honnoji incident, Toyotomi Hideyoshi has taken the reigns and is well on his way towards unifying Japan, and is now looking outwards for new conquests. What followed were Hideyoshi's two-part Korean "expeditions", carried out in 1592 and 1597, in which the Nippon-Maru and Kuki would act as flagship, and Admiral (respectively of course). Initial naval encounters would lean in the Japanese forces' favor, that is until Korean Admiral Yi Sung-Shin designed the ironclad Ko-Buk-Son warship otherwise known as the "turtle ship". The "turtle ships", called thusly because of their turtle like appearance (hmm... Go figure), were outfitted with an impenetrable spiked iron roof which rendered them practically immune to missile and melee attacks. These doozies also featured a nifty battering ram in the shape of a dragon as the bow of the ship, which proved effective in subduing the Japanese ships which were not accustomed to ramming as a form of nautical attack. Details as to the specific encounters between the two fleets are highly subjective due to the degree of nationalistic pride on both sides and bad blood between both nations, as such, it is often hard to determine exactly how these battles transpired. At any rate, the standoff between two of the greatest naval leaders in East Asian history, would ultimately result in an overall naval victory for Yi who is revered to this day as a savior in his homeland, and highly regarded in naval military circles, sometimes referred to as the "Nelson of the Far East". All of this came at a cost however, as Yi was made a martyr in the final battle of the Japanese-Korean conflict.

OK... So what the heck were you hinting at so vaguely in the paragraphs above?
The issue of which country developed the first ironclad warship is to date a hotly contested matter. Many Japanese historians still contend that the "Tetsu Bune" were in fact the first ironclad warships in the world, and if you take the above facts at face value that is what one would conclude. Of course, this leaves one glaring question unanswered, as in:

What happened to Nobunaga's invincible "Iron Ships" during the Japanese invasion of Korea? Why did they prove so ineffective?

Before answering this question, one must first consider the nature of nautical combat in late 16th century Asia. Fact: the technology to build "cannons" in the sense of the kind we are accustomed to in the West did not exist at the time. Most of the missile weapons being used, be it muskets or arrows charged with explosives (like those used in the Kizu river battle) were only effective at a relatively close range and were not powerful enough to actually sink a ship. As such, the main objective in a naval battle was to demoralize and incapacitate the members of the opposing crew, to the point where the ship could be forcefully boarded. Since the armor was used only to deflect musket balls, and protect the ship and crew from explosive arrows, a rather thin sheet of metal would be sufficient to this end. As mentioned before, ramming was not employed as a method of attack, so thickness of armor was not an issue either. While some accounts paint Nobunaga's ships as completely clad in iron, most of them are based on nothing more than second-hand information, or records coming from Nobunaga's own faction (which are highly partial to say the least). One of the few objective accounts comes from one Padre Gnecchi Organtino a Jesuit missionary who claimed that Nobunaga's ships were "massive in size, and likened to those designed in Portugal". However, one should note that nothing is said in regards to any armor plating, which should have been the first thing he pointed out, as the use of iron plated ships was not even being considered in the West at the time. The most likely explanation is that ships like the Nippon-Maru were only moderately outfitted with armor, and when faced with the "Turtle Ships" which were specifically designed for aggressive ramming, their thin armor plating was probably a non factor. Also of note is the fact that the hull of the Korean ships were made of pine, which was considerably more studier than the cedar used for their Japanese counterparts. Finally, most of the Korean campaigns were carried out in narrow, torrential bodies of water, which was a detriment to big, cumbersome ships like the Nippon-Maru.

Miscellany
For all of you strategy game aficionados out there, Kuki Yoshitaka and his ironclads are included in the fourth installment of the Nobunaga's Ambition series (Busho-Huun-Roku) onward. If you have trouble finding him, his home fief is Ise-Shima. Other naval geniuses in feudal Japan include Takigawa Kazumasu (Oda) and Kohayakawa Takakage (Mori). Collect them all!

Although neither Yi or Kuki are represented (which is a shame), I also recommend Broderbund's excellent, The Ancient Art of War at Sea.

References
www.mariner.org/monitor/02_navalst/ironclad_warships.html
www.shinjin.co.jp/kuki/suigun/yoshitaka_e.htm
M. Suzuki, Searching for the Truth of the Feudal Wars, Kodansha, 1998.