I have created a new post with updated instructions and screengrabs, which can be found here: Using BBC iPlayer, Spotify or Hulu internationally.

BBC recently released their iPlayer which allows you to watch many of the BBC shows on the web. Unfortunately for us, BBC does not allow users outside the UK to watch these shows. Luckily there’s a way around this. There are many sites recommending different software to use, but having tried many ways, this is the one I’ve found that works using Windows and Firefox: (note, you can also use instructions below to watch other content blocked from viewing within the US, or even to watch content only allowed in the US when you are abroad)

Step 1: Download and install the latest stable release of Tor using the default options. You can uncheck Privoxy in the install if you like. We will be using another proxy tool. (Tor is a tool that allows you to browse the web anonymously by routing your requests through various servers/proxies)

Step 2: We now need to ensure that the last server your request is routed through is a server in the UK. Go to https://torstat.xenobite.eu/. Click on the pulldown next to "CC:" and select "GB" and hit "search". Now click on the ">" under "Exit". You now have a list of servers in the UK that are allowed to be used as Exit Servers. Take note of all the nicknames of the servers except those marked Unnamed.

Step 3: Go to Start Menu and open All Programs -> Vidalia Bundle -> Tor -> torcc. This will open the Tor config file. Scroll all the way to the bottom and enter the following lines:
StrictExitNodes 1
exitnodes <list of the names you found in step 2 separated by commas>
An example of the second line above would be:
exitnodes anonion,anotherlink,colinwillsdorkyahoo
Save the file and exit notepad.

Step 4: Run Vidalia. After a few seconds, it should say "Connected to the Tor Network".

Step 5: Install the Foxy Proxy addon for Firefox.

Step 6: When you install Foxy Proxy, it’ll ask you if you want to add a Tor proxy to it’s settings. You’ll want to set up the Tor Proxy to have the following 2 patterns: BBC iPlayer pattern – http://*bbc.co.uk/* and Tor Check pattern – http://torcheck.xenobite.eu/*

Step 7: Check that you’re exiting through a UK server by going to http://torcheck.xenobite.eu/index.php

There you go – now, when you have Vidalia and Foxy Proxy running, whenever you go to the iPlayer site, you’ll be able to watch videos. Note, that you’ll probably have to repeat step 2 and step 3 intermittently, as the same UK servers don’t always exist.