Grasshopper is a test vehicle with the aim of making the first stage of the Falcon 9 reusable. Grasshopper, for example, has one motor, while an F9 first stage will have nine. (Thus the name.) The landing gear is also obviously not streamlined for rocket use. But the tankage and avionics and propulsion and such are all from an F9 first stage. So it's pretty close to what will really fly, but not quite.
Though it may go into "space", a Falcon 9 first stage will not go to orbit; it is decidedly suborbital. This makes it much easier to recover, as it is not going that fast (for a rocket) at engine cut-off. (The second stage takes the payload the other 2/3 of the way to orbit. While they imagine recovering the second stage, that's a lot harder.)
Being suborbital, the first stage probably will not do a retro-burn, as it will come back to Earth naturally. Entering the thicker part of the atmosphere it will reach its terminal velocity, possibly falling on its side to make that slower. They might use drogue chutes for this, or might not.
Once it has fallen to some frighteningly small distance from the ground, it will right itself and use a small fraction of its launched fuel (probably close to what current F9 stages keep in reserve) to slow down to landing velocity from terminal, steering along the way to land exactly where it needs to go.
I once did some rough numbers to guess that the landing propulsion will take 10-20s with 1-2 of the motors, using 5-10% of the fuel. (With only 5% fuel, a rocket stage is actually crazy light, which makes this work.) Hair-raising, but well within the capabilities of today's sensors, actuators, and computers.
No one's actually done this yet, but it seems plausible. I worry mostly about the stage surviving the initial re-entry, because reports are that earlier F9 first stages, which were supposed to water-land on parachutes, were totally trashed, possibly during that event. SpaceX actually has that data, though, so that's either not the case or they have some plan to make it work.