"Indications are that Iran isn't after an apology or an admission of any border violations from the UK government, and will settle for a prcedure that would elinminate the risk of future violations. In other words a face-saving way out of a mutually dangerous situation for both sides."

McGrath has it best. After all Britan had outlined the original border to be the banks of Iran. Later the border was moved to the center of the river + etc. This could be used as the excuse to define the border without leaving any room for disputes with Britan acting as moderator (it'll also make up for their !st border blunder) between Iraq & Iran. Britan would be seen as doing something possive (a good guy) for Iran (helping to clear up the border issue) without either nation losing face. Iran wouldn't be losing face because it finally has it's own border issue cleared up & can free up the sailors and be seen by their own as getting something back in return.
The only problem would be the US trying to get involoved by adding their 2 cents worth & having the whole thing turn nuclear & blow up in everyone's face. Keep the US out, remember that our guy can't follow a road map (DUI at the wheel), imagine him as a drunken skipper trying to chart a course in disputed & confused waters, he'd have a hard time getting past a barroom door.   

Barry