The problem of course with democracy is that the people in muslim countries tend to cheerfully elect the worst possible governments. We've seen examples in Iran, Gaza and Turkey. We're on the verge of seeing it come into play in Egypt, Iraq and Afghanistan too. If all democracy does in the middle east is promote islamic extremism, then we really should not be supporting it.
Our interests are better served by having strongmen like Mubarak running things... as you said, he was a safety valve and was doing his best to keep the extremists in his own country at bay. But I will go even further than that. Mubarak's government was more than a strategic ally, he was a close personal ally of the USA. Compared to other middle eastern countries, I would say he actually did have some of our best interests at heart. Had his hand-picked successor followed him, we would have continued that relationship... but now... we get Iran 2.
Agreed, absolutely agreed.
Mubarak kept the peace with Israel. He was vastly preferable to the dictators we prop up with aid and weapons in Pakistan.