I guess we won't be seeing a Muhammad/Spider-man crossover comic soon, eh?
Seriously, though ... Gypsy Scholar has several recent posts worth reading, and be sure to check out the comments section. Protein Wisdom has a post that's been receiving a lot of attention (and has a very high level of lit/crit content), and let's not forget Al-Hiwar: Words Matter, the most relevant participant in TTLB's Academy community. Of course, there are many other people blogging on this issue, but these were a few I thought you should not miss.
One question, though. Now that I've seen the original cartoon, how did anyone know it was supposed to be Muhammad? I mean, it just looked like a dirty, bearded guy in a bomb/turban to me.