So far still 1 is officially dead, although 7 have been shot, which seems to indicate not an ordered volley, but rather some officers loosing their nerves over the crowd they were facing.
As for Ahmadinejad, I believe the West is doing him wrong by branding him as a nutcase. Surely, he's no help for world peace, but he is just a guy who knows which strings to pull to get the conservatives backing him. Just like Bush knew how to get support from conservatives in the USA, or any agitator in a democracy.
How much the Iranian state can be labeled as a democracy, now that's another discussion as a great deal of power lies with the Ayatolah and with several religious boards. Although this year, for the first time, there have been large scale televised debates, something that would imply the actual involvement of the population with politics. The fact that the government didn't actively intervene with the rallies of the opposition before the elections also doesn't indicate the state's desire to control the people in their liberty of speech. Only when after the election, there were massive (1 million) marches, there was an oppression. Question remains, how well did the protesters behave?
But basically, the principle of Iranian national politics still is that anyone can do politics as long as it isn't a grand reformer. Continuity is a major issue for the Ayathollah, which is understandable given the history of the county with wars against Iraque and the overthrow of the old Sjah. However, they aren't as diabolic as many here think. Family members of the Sjah still live in Iran and some of them still attempt politics, although not that successful. On the other hand, the country is one of the leading nations when it comes to research such as stem cell research, something that under e.g the Bush administration with the no abortion politics wasn't even imaginable...
Mind you, I don't want to defend Iranian politics or Ahmedinejad, I just want to point out that there is a lot more to Iran than just "ragheads that want to nuke Israel". No black and white, just a lot of shades of gray