In his Middle East Journal, Michael Totten has an interesting essay featured on American views of Arabs and how these views affect the way we deal with the people of the Middle East.
I think that democracy is not static and that in fact it can represent the people of different cultures and societies.
India and Japan are examples of this.
I think the Middle East with its various ethnic groups can govern itself if given the tools and the oppurtunity.
Corruption may well be their greatest challenge, not religion.