When we address the issue of how America and Americans should be involved, I think we need to pay very close attention to history. In the U.S., 1979 is remembered as a black year for democracy in Iran. In that year, a theocrat overthrew the existing government, which was credited with modernizing Iran. Americans were held hostage until Ronald Reagan - the strong-man of Western liberalism - ensured their safe passage home. Since 1979, Iran has been perceived as an enemy force in the region; threatening Israel, funding terrorism, and opposing secular democracy. This is all true...
...and yet at the same time it really isn't.
Khomeini was a theocrat, with all the autocratic pronouncements of the old caliphate, and none of it's assimilating Oriental spectacle. Nevertheless, the Iranian Revolution of 1979 was a thoroughly popular revolution. Khomeini did not empower the Iranian people, but he did liberate them from what was popularly perceived to be a Western client state. This is no reason to laud the changes that occurred in 1979, but it should help us to understand that the protests happening now are an outgrowth of the 1979 revolution, not a repudiation of that revolution.
As Andrew Sullivan has pointed out (and, I should note, the Daily Dish has been offering absolutely exceptional coverage of the protests) the leaders of this current movement are not the "next generation" of democratic outsiders, rather "the leading faces speaking out — Mousavi, Rafsanjani, Montazeri — are figures who were among Khomeini’s inner circle in 1979". I think, to put it very roughly, we may be witnessing the transition from a popular regime to a democratic government. This is not the fall of the Berlin Wall, in other words, so much as it is the fraudulent, bloody, and haphazard transition of a long revolution.
I think a lot of people, out of rightful outrage at Ahmadinejad and the spawn of the 1979 revolution, are too quick to assume that those elements need to be forcibly replaced or challenged by an outside force. In my mind this would take us out of the frying pan and into the fire. In 1953 the Central Intelligence Agency, on the order of President Eisenhower, replaced the duly elected prime minister Mohammad Mossadegh, and allowed the Shah to consolidate his power and banish all prospects of a constitutional monarchy, which Mossadegh had been trying to establish.
More forceful American intervention right now wouldn't introduce a new Shah. But that really doesn't matter. The point is, from 1953 to 1979 American and British intelligence ultimately decided who would rule the Iranian people out of a fear that popular government would privilege the communists. In many ways, 1979 replaced one autocracy for another; nevertheless, it replaced an imperial autocracy with a popular autocracy. For those concerned with the advance of liberal democracy, that's small consolation. For the Iranian people, I imagine that is a much greater and more positive shift than the American public generally supposes. And clearly, the seismic changes occurring now are positive from both the American and the Iranian perspective, and we should support them. But we need to remember that this long march to democracy started in 1979, not 2009, and that it is certainly not a reassertion of some imagined liberal orientation that reigned in the fifties, sixties, and seventies, only to be repressed by the dark Khomeinian cowl.