I am often told of a power struggle within Iran; at least the secular part of it. There is evidence of it; Iranian shifts in Iraq policy and shifts in strength of anti-Israeli and anti-American sentiment show that such is clear. Iranian students are often lauded to be more pro-Western and moderate than their parents, defying Iranian dress code law by cutting their hair close and wearing ties. In the late 1990's and early 2000s, moderate reformers swept into power, and in 2004 lost it.
After this election, the conservative/reformist split of seating seems to have not changed much, despite the fact that the cleric-led Guardian Council banned most of the reformist opposition from running due to insufficient loyalty to Islam (that same Guardian Council is calling the election a "Victory Against the West"). But among the conservatives, a fissure is growing. A faction of conservatives is rallying against Ahmadinejad's hard-line stances, which they say are bringing UN sanctions, as well as Iran's faltering economy, suffering from high inflation and unemployment.
The reformers might have done better, had President Bush not encouraged Iranians to boycott; his words likely inflamed Iran's sense of nationalism and anti-Americanism.
The EU and US have condoned the election as unfair due to the banning of reformer candidates, though the protests will go no further than that, and Iran's parliament will press on, functional, for the next four years.
Reformers are also calling this vote a victory, given that they held on to most of the seats they had despite many of the men and women who had campaigned for seats were blocked.
The interesting part will not be what the reformers do, but what the opposition conservatives do. Ahmadinejad is in for a tough next year; presidential elections occur in 2009, and a few conservatives are looking to lead their faction towards a presidential victory, beating out Ahmadinejad.
It should be noted that not all right-wing religious fanatics are the same. While not reformers, these conservatives are likely to do more looking inward, concentrating on economic reform and strengthening cultural and religious unity. What Iraq policy the anti-Ahmadinejad conservatives hold is unknown to me, but it is likely to change.
The US public won't see much in the way of immediate changes from this election, but Ahmadinejad may be forced to make foreign policy concessions; look closely for subtle changes in rhetoric and action in Iran's foreign policy in the next few months. I'll keep my eye on what's to come.