Analysis: There are a number of different issues here. The first one is the character and intentions of the Iranian government. I'll start with the international side of things, or at least my speculations on it.
Iran's government isn't likely to win any unpopularity contests on the international stage (not against the likes of Burma and Israel, certainly), but they are likely to place very well in such a competition. And like most governments, they want to win friends and influence important people on the international stage. But combine their poor starting position with the history of both the revolution and the war with Iraq, doesn't make this very easy. However, in the last few years they've been enjoying warming relations with some old enemies because of the rampant, irrational hatred they've attracted from the US government.
Now, a quick look at the other two parts of the Axis of evil reveals a strange dichotomy in how the Americans deal with the situation. The first case is Iraq: dictator already defeated once, UN inspectors holding any BCN weapons production to a standstill, lots of oil revenue. No powerful neighbors. US reacts by invading the country, followed by crazy insurgency and massive destruction.
the second case is North Korea: crazy dictator, miserable and starving populace, no resources to speak of, almost no foreign contact, much less UN inspections, and China for a neighbor. Very probably that said crazy dictator has nukes capable of reaching prime US ally. US reacts by engaging in talks, through China.
From that little dichotomy, it makes a bit of sense that Iran would go hell for leather to develop a nuclear weapons program. And as they're already labeled as an enemy of Freedom, it's not like they'd develop any new enemies by doing it. Economic sanctions? Whatever. Bush Co. has pissed off so many people that if they actually do anything to Iran the Iranians will be rolling in too much political capital to care. And hey, if Reagan is any indication, just because the US says no doesn't mean they aren't willing to deal between closed doors, especially with a country that outputs more than a gigabarrel of oil every year.
Now, this time they've got the entire security council saying they should stop for a while so talks can happen. Well, if Iran wants to avoid looking like wusses in front of the rest of the Muslim world, there's no way no how they're going to accept that as a precondition to talks. They'll only stop when they have a solid agreement on the table that actually gives them goodies, rather than just the promises of those goodies. Also, why should they be scared of the security council? What are they going to do to Iran? Even if they could put together some sort of armed response, that's weeks away, and the Iranians will probably have negotiated there way out of the mess by then.
Next issue is the terrorism question. Is Iran supporting some groups like Hezbollah? Probably. Are they going to hand them the keys to the nukes cabinet? Nope. The critical difference between nuclear and non-nuclear weapons will stop them. With basically any non-nuclear weapons system, it is plausible that Hezbollah could acquire them from any number of shady dealers, either in the Middle East or in Africa. I doubt nukes are so readily available on the international black market. If terrorists were to use one, I'm willing to bet all the top intelligence services in the world will work together to trace it back to its source. If a nuclear attack gets traced back to Iran, invasion is guaranteed. Nuclear retaliation is possible. In fact, given how likely the US is to blame Iran for terrorist actions, Iran has a large vested interest in making sure no terrorists get their hands on nukes.
But if that's the case, why pursue a nuclear program at all. Well, there's the deterrence value that I've already talked about. Then there are the economic applications of non-weapons programs, which unfortuantely are easily convertible into weapons manufacturing facilities.
First, nuclear energy programs in Iran in the 50s, in a cooperation between the Shah and the Americans. So we helped the stooge set up the infrastrucutre that the next government inherited, and are now trying rabidly to shut it down.
Second, while Iran does sit on sizable oil deposits, that doesn't mean they want to be buring it for fuel: Iran can make a lot more money selling it on the international market, or using it to create more specialized goods, like plastics. And Iran doesn't have much else to sell: it's land isn't terribly productive, and it's a long way from being able to convert to a service based economy. It imports food, for instance.
Third, HALF the Iranian population is under the age of twenty. Their economic infrastructure needs to expand at an astonishing rate if it's going to have a prayer of meeting that demand, and an alternative source of cheap power are going to be critical to that expansion. Furthermore, having a nuclear energy program calls for the development of human capital, which Iran desperately needs and which the oil business really doesn't promote.
I think I've written enough for now. To restate, whether or not Iran has nukes doesn't matter, because they won't use them unless they are attacked, which they shouldn't be because they aren't a particularly aggressive state anymore. And they desperately need the economic benefits of a non-weapons program in order to avoid a humanitarian crisis.