Wikipedia has an up-to-date overview of the whole brouhaha over the Muhammed cartoons.
What many seem to be missing is this: The problem is not Islaam, the problem is fundamentalism. There are fundamentalist moslems, yes, but also fundamentalist christians, jews, hindus, anti-homosexuals, conservatives, communists, etc…
And while fundamentalism seems to be on the rise these days, I believe there is cause for optimism. Today fundamentalist movements and organizations everywhere are being crowded by an increasing modernism driven primarily by science and mass media. Lately the internet has been pressuring them even further.
Fundamentalists everywhere currently lash out in panic at seeing their base erode, and we’ll see it again and again, though less and less. In that light it’s hardly surprising. I mean, we can’t really expect fundamentalists to go out quietly, can we? :o)