I'd be glad if we stuck to the topic, and preferably split the
ad hominem/misquoting discussion out, it starts to clutter the thread.
Problem is, that's a very Western take on the issue. In most of these countries Islam isn't just a religion, it's an entire way of life, it defines who these people are.
You may not agree with that, I know I don't, but to Muslims, their faith is fundamental to defining them, asking a Muslim to give up Islam would be like asking him or her to cut off a limb, it would be simply unthinkable to them.
This is actually the case with most religions. Even Christianity. Would you like xmas, thanksgiving, sundays, easter and the like taken away from you? The only reason we see Muslims as extreme is that due to commercialization and general cheapening of Christian traditions, we stopped connecting them with religion. Muslims are "real" believers in their faith, who don't celebrate their holidays just because everybody does. It means something for them. Let's face it, how many of you though about Christ's teachings and not about the presents last xmas? I have exactly one friend who is a "real" Christian, who hadn't forgotten the true meaning of her faith. Even though I'm an atheist, I respect such people for sticking to their beliefs and actually being who they say they are. Note, she's not a fanatic or anything, and respects other religions. For such people, faith is just as unchangeable as skin color, as it's integrated into who they are.
Now, in this incident, both sides are guilty, of overreaction and of lack of understanding of the other side. While I'm not defending the killing of an US ambassador (Bible, Koran, Panca-Sila and many other holy texts rather unambiguously agree that killing is bad), I'd say that the French, coming from a country which claims to be "more civilized" should've known better. Middle-eastern people aren't exactly known for taking jabs at their religion well, and it's a well known fact. If the relationship between the east and the west is supposed to improve, the west should be the first to reach out it's hand, and this should be an unambiguous gesture.