The growing discontent among the youth of Iran (who significantly make up a huge proportion of the population there) is a great thing for nearly everyone.
If the fundamentalist regime could be toppled someday, a friendly, relatively secular (compared to now, anyway) Iran would be an invaluable ally for the USA/UK in particular, and the West in general. Unlike trying to rebuild say, Iraq or Afghanistan, Iran already has a large, well-educated professional-class of doctors, engineers, etc. living abroad right now that could help to lead the country. And their petroleum reserves would mean some income for the country while a competetive industrial base is established.
I'm not an expert on the Middle East, but my understanding is that on an ethnic level, there has traditionally been little love lost between the pro-Western, Farsi-speaking Iranians and the Arab countries (e.g. Saudi, Iraq, Yemen, Egypt, etc)...Not much that bonds them culturally except for Islam and petroleum. An allied, progressive Iran would be an invaluable partner in stabilizing the Middle East...at the very least a far better "ally" than the House of Saud, and could quickly become by far the wealthiest and most powerful nation in the region. The Iranians have always been more tolerant of non-Muslims than the Arab states. Even now, I believe there are sizable communities of Christians and Jews in Iran who are quietly tolerated.
Also, I think I have read that even though the current regime supports Hezbollah and spouts the requisite anti-Zionist rhetoric, the Iranians historically have even had much better relations with Israel than the Arab countries.
If the Iranian people are able to cast off the cabal that are in power now, the West should embrace that country like a long lost lover. But the key would be to help the Iranians set up a democratic, progressive government..not simply another Shah. It is against the Pahlavi (sp?) regime, after all, that fundamentalist Islam appeared an attractive alternative
I think a Middle East with two friendly, regionally strong, relatively democratic countries like Turkey and potentially Iran, which were cordial with Israel, would be much more stable than it is today. That's not to say the same problems wouldn't exist, but progressive, democratic interests would have considerably more leverage.