lwarmonger,
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This assumes that either is likely in the next 20-30 years. I don't think either really is, as differing circumstances (namely a lack of the massive competetive advantage in labor that China possesses) make regime reform along the Chinese model (increasing riches followed by increasing freedom) unlikely, while regime change discounts the still substantial support that the Mullah's possess in the countryside
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the "chinese model" actually isn't very exclusively "chinese". in fact, south korea, singapore, taiwan, japan, and (to a point) indonesia adopted it [more accurately, the export-led growth model] a good deal earlier than the chinese. and one cannot argue that the likes of singapore has a "huge competitive advantage in labor".
as for regime change, well, the likelihood of regime change is a great deal higher now than it was 15-25 years ago, no? there is nothing that says that given continued mullah poor leadership- something that hasn't changed in the past 25 years- that the boiler won't go boom. in fact, a-jad is busy alienating himself from the very poor that elected him, with his incompetent handling of domestic affairs (not that his socialist policies is going to help iran much, even if they WERE successes).
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It depends though. While the Supreme Leader may or may not be rational, we aren't playing against solely a nation state here. Were a couple of other nations to acquire nukes within the next ten years (or were Pakistan to come apart), a "reasonable" conclusion for Iran's leadership might be that covertly giving nukes to a Shia extremist group (perhaps one not even supported by Iran) could be pinned on someone else. It is only illegal if one gets caught.
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letting nukes float around with no direct control is usually not the act of a rational political leadership
and given how quickly the US figgered out who pulled 9-11, it's a bit hard to believe that even the iranians could be so dumb as to think they could pin such an act on someone else (ESPECIALLY given the heightened attention on iran regarding this matter).
as a quick example of this, has there been any evidence to date that hezbollah has been even given mini-WMDs, aka chems?
it seems to me that for iran, nukes are going to be used as they usually are in power politics. more for domestic rah-rah purposes, and most importantly, for nuclear deterrence. for me, actually, one of the most worrying aspects of iranian nukes is not that the iranian leadership will give it away to the terrorists, but that if the regime falls, those nukes might...disappear.