I think in the end this British sailor kidnapping will prove to have been a big mistake by Iran.
In the short term, their goal of embarrassing Britain may have worked, thanks to the eager greediness of our news media for bad news and their anxiousness to toss barbs at Blair (and indirectly at Bush). Mission accomplished.
However, after that, I'm just not seeing a good move for Iran. They can't just hand these guys back. Well, they could and in some sense it's probably still their best move ("We're so confident that we can kidnap with impunity that we don't even need these hostages; we can take whom we choose, when we choose. Your entire armed force is hostage to us now.") But in reality it'd be seen as weakness by their internal factions, probably.