I really enjoyed Argo (probably going to win the Best Picture later tonight; rentable in iTunes and the PS3 video store). It's not too often that you get such a tense geopolitical thriller. The story is more or less accurate and, obviously (hopefully), the Iranians featured in the film are not reflective of the entire population.
To get a more balanced impression of Iran, I highly recommend the following films. Unlike Argo, most are quite slow.
-Crimson Gold (about a pizza delivery man).
-Persepolis (a historical cartoon)
-Offside (a girl trying to get into a soccer stadium).
-The Queen and I (about the wife of the Sha, living in France)
The Queen and I
In Canada, The Queen and I is curently available in Netflix.
Other movies set in Iran