Most nuclear reactors use enriched uranium for their fuel source. Though they could use non enriched uranium, it is far less efficent in power production.

The Iranians want to use enriched uranium in their nuclear reactors. The problem is that spent enriched uranium can be "re-enriched", resulting in usable reactor uranium and plutonium as a byproduct.

Plutonium can be rendered inert by a chemical process. The fear is that the Iranians will not choose to do this, and create nuclear ordinance instead.

There are varying grades of plutonium which are created by differing lengths of time-in-use in a nuclear reactor.

Weapons grade plutonium requires a very short amount of time in a reactor, so that reactor would regularly be off-line, and not produce much if any power for consumption.

The Russians want to control the production of enriched uranium, and keep Iran out of the business of enriching uranium. By controling the supply of uranium, Russia can monitor the volume of materials Iran is consuming.

If Iran chooses to secretly re-enrich uranium, the amount of materials returned to Russia for re-enrichment would decrease, and their power producution would be limited.

In light of my very minor research, the Russian proposal seems to be a viable control on Iran's possible produciton of weapons grade plutonium.

Of course, questions still remain in my mind about the availability of base uranium in Iran, and whether or not it would be easy for them to secretly create their own supply of enriched uranium.

If they could somehow produce their own uranium without being noticed, the Iranians could increase the amount of spent uranium returns to Russia, and render the monitoring process ineffective.