Pirate's Cove

After consulting with Brian from snapped shot, seeing the high res photos he was able to get, I was pretty much convinced he was correct in that the missile was real, as was the launch. I suspect that the UPI did a tiny bit of airbrushing and/or enhancement to make the missile look a bit sharper. And, here is more evidence that the missile launch was real

Ynet News has a photo from the AFP, looks like the same missile without enhancement, however

Iran declared Wednesday that it had test-fired a new generation of surface-to-surface missiles, named Sejil, with a 2,000-kilometer (1,200-mile) range, capable of reaching Israel and US bases in the Gulf.

However, Western experts told the London-based Times it was probably just another name given to the Shahab 3 missile which had been test-fired on previous occasions.  

So, real missile, probably old missile type repackaged.

On another note, it appears that Iran no longer wants unconditional, direct talks with the US. Heh! See Hot Air.