We had to apply twice for a visa, the first application having been rejected (probably because of the political situation with the US at that time). Just try another agency if your application is rejected. We got our visa with iranianvisa.
Process: contact the agency, send a scna of your passport and pay either via moneybookers, either via bank transfert. It is either with moneybookers. To transfer money, you will need to open a euro account in a turkish bank, for which there will be fees. We then waited 3 weeks before getting our authorisation code by email. We got our visa in one day in Erzurum.
Documents: 2 pictures (with a headscarf for women), 60 euros (for Belgian and French nationals) and 2 forms that the consulate gives you. If you go early in the morning, you will get your visa in the afternoon.
Going through an agency avoid waiting for a few weeks in the same city. We also heard there are more chances of getting the visa if you go through an agency rather than do it yourself.
Embassies in: Istanbul, Ankara, Trabzon and Erzurum.
In Erzurum, you can pay the visa at the embassy only on Saturdays. On the other days, you have to go to the bank in the city centre. Emabssy is closed on Friday and Sunday.
Extending the visa is very easy. We did it in Shiraz and it took us 2 hours and about 15 euros each for 30 days.
As amazing as it may seem, it is impossible to withdraw money in Iran. The ATM network is purely national. So you have to bring your whole budget in cash. Lucky that we always felt safe in Iran.
You can change euros and dollars at the border, there is a bank just after the customs. The exchange rate was the best we got in Iran but maybe it was due to the economical situation.
The currency is the rial but everyone speaks in tomans (1 toman = 10 rials).
Road & Accommodation
Hotel Mashhad, Ferdosi street. 91.000IR for a double room, 140.000IR for a 5-bed dorm. Shower: 10.000IR. Closed courtyard to put the bicycles. Basic but central. Next to the tourist office where there are friendly people and Lonely Planet guidebooks for 6 euros.
Hotel Naderi, 572 Jomhuri-ye Eslami avenue, close to the british embassy. 230.000IR for a double room with bathroom, 150.000IR for a single room with bathroom. Better location and value for money than the hotels next to Amir Khabir street.
Amir Kabir Hostel, Chahar Bagh Abbasi street. 160.000IR for a double room. Shared bathroom. Friendly atmosphere with the courtyard to chat and eat.
Iran Hotel, Karim Khan-e Zand Bd. 200.000IR for a 4-bed dorm. Shared bathroom. Nothing special but we didn't find a single friendly hotel in Shiraz.
Silk Road Hotel, Masjed Jameh avenue. 300.000IR for an ensuite double room. 20.000IR for sleeping on the roof. We slept in a tiny alcove on the rooftop (100.000IR). The atmosphere is great. Everyone gets together in the yard to eat and chat. The owners are very friendly. We kept Yazd for the end to unwind and didn't regret it!
Mashhad - Sarakhs:
A café in Kharzar, about 65km from Mashhad. Take enough water (we always had 3-4L each). Steep climb-up of 3km at Mazdavand (we did it in a truck to reach the caravanserail in the evening). Café in Gonbadli.
Mashhad: Vali homestay, Enqelab Eslami 6 - N°277, Bhar street. 90,000 rials for 1 bed (shared bathroom), breakfast and dinner included. It could be cleaner but the atmosphere makes up for it. A lot of cyclists and motorcyclists stay here. Great home-cooked food.
Camping at the caravanserail of Robat-e-Sharaf (130km from Mashhad), 6km from Shurlaq (turn right in the village). Wild camping close to the border.