I take the view that the Iranians have to sort this out for themselves, and decide whether to push for a full scale revolution that even their convenient opposition head would not want. Western leaders should say little (while providing technical support via the usual channels, to allow more discussion and communication). This narrative will unfold as the protesting goes on: it is rather like the Chinese did around Tiananmen Square where a whole series of events focused around a politburo individual but became for a full scale democratisation - and the Chinese responded by killing its own people. But, as a result of its lost authority, the Chinese went hell for leather for privatisation and development, for a non-political space as well as politics, and some corruption to operate and hold in check, and keep the people busy. The Iranian regime, being committed to a strong ideology of religion, cannot do that: a democratic regime would be culturally Islamic but not power Islamic.
It must be obvious to most of the folk of Iran that there is an incompatibility between a clerical supreme power and a democracy that wants rights invested in the democracy itself. Thirty years ago there was a revolution that had economic, social, international and religious elements, but the Khomeini regime came in because he was the obvious head - but he came in with power and oppression to destroy the socialist revolutionaries and indeed the liberal democrats. Religion and the evil of power took over.
The Iranians like the Chinese are a developed and intelligent people and with a strong and educated middle class, itself a holder of power, but this scruffy 'Ah my Dinner Jacket' bloke in power has shown a form of power manipulation between the clerics on the one hand and the rural folks on the other - sending bits of money their way so that they make ends meet, but at a cost to the economy and indeed real social reform. In doing all this and frustrating development, he and his regime (he is more its puppet than the regime his) has laid himself open for a triggered response to an event out of the frustration that has been bubbling up for a long time.
And the nature of the new media allows power to be decentralised into comment and activity: the authorities show their hand through censorship and closing much of it down, but it leaks badly. Falun Gong people in China can tell the Iranians a thing or two about communication.
What puzzles me about this Iranian vote fixing is why they didn't attempt to be more subtle, to make at least an effort to produce something credible in the regime's desired result. They can't do it now as a 'recount' as the cat is out of the bag. The regime's contempt for anything democratic was shown in the early announcement, despite the volume of the record vote, and is probably its worst mistake, so that in the end the regime of clerics and violence may well be toppled by a people who want the right to vote effectively and who won't be fooled.