Whats going to happen in this event?
Iran wins: Small annexations of Southern Iraq, puppet govt installed, Shia becomes state religion? US invasion?
Iraq wins: This is less clear, anyone want to speculate on what they might do?
Iraq's war aims were to secure some tiny rocks in the Gulf for the UAE (they were useless and the UAE didn't care about them, but an actual territorial dispute between Iran and an Arab country was a convenient figleaf) and to nab Khuzestan from themselves. Khuzestan is an Arabic-speaking province of Iran on the border. It's rich in oil and holding it would given Iraq control of the Shatt al-Arab, but the people are devoutly Shia and almost entirely stayed loyal to Iran during the war, against Iraqi expectations.
I don't think Iraq had the capacity to impose a puppet government on Iran. They did hope to break the new Islamic Republic under the strain of war, but I doubt they could create and control a government of their own choosing in Tehran. I don't think their efforts to encourage seperatism among the Balochs were at all succesful. The only way to create puppet states from Iran's ethnic minorities (who are mostly very loyal anyway) would be to physically control the land, which is hardly likely.
The Kurdish issue is complicated. Both sides of the war had Kurdish organisations co-operating with them out of conveniance, but I think for Iraq this was purely for military advantage. I highly doubt Iraq would create any kind of Kurdi state. Annexing Iranian Kurdistan would simply be more Kurds and no more oil, and Saddam would certainly not give away any Iraqi territory to a state for an Iranic people, given his rabid Persephobia. And of course Turkey would be majorly pissed.
However, it was an Iraqi goal to secure leadership of Ba'athism and the Arab world more generally, which was perceived to be up in the air after Egypt hopped off the wagon by making peace with Israel in 1979. This is sure as hell not going to lead to a federal state any time soon (Jordan still hates the guts of Ba'athism and so on), but Iraq may be able to assert its leadership at the Arab League.
If Iran won a clear early victory, the US would probably step in to enforce the status quo ante bellum. If for some reason this doesn't happen, I'd imagine Iran would establish a Shi'a puppet state in part or all of Iraq and have it recognise their control of the Shatt al-Arab (I doubt they'd annex any Arab land, but if they did, it would probably be the Faw peninsula). I'm not sure about Iran's position on Kurdistan. They wouldn't create a state: as with Iraq, this would piss of Turkey and give away Iranian land. They might, however, annex part or all of Iraqi Kurdistan.