I'm still working on my own thoughts about Iran, but there's a fine dialogue about the matter over at the League of Ordinary Gentlemen:
When the post-elections rioting took place in June I said that we had entered a situation in which The Reformers had “won” (i.e. totally de-legitimized the regime) and therefore were now about to face the real brutality. They had pushed the regime into a situation in which either the regime would have to back down and open the system OR they would have to become a completely brutal totalitarian regime and enter complete crackdown mode. Either way I thought the regime’s (halal?) goose was cooked. It was only a matter of time. Either way The Islamic Republic of Iran that had been the governing paradigm since 1979 was over.

I think the events taking place since the election and now have basically shown I was right (or at least not a complete idiot :). I still think history (and the future) is on the side of The Reformers, but there is no predicting when or where or what will be the final straw that breaks the camel’s back, nor exactly what will come out the other side of this political turmoil.