Here’s an interesting article arguing that European Muslim discontent is overrated.
I've always thought the "Eurabia" thing seemed hysterical and overblown, largely because alarmist predictions about population explosions in general have a history of being politically motivated and ultimately proving false; it is great to see so much info pulled together to prove it baseless in the here and now. I would add to the theory presented in the article about schadenfreude the additional agenda I've noticed in the writings of people like Mark Steyn, to fold "Eurabia" panic into a narrative about sexual degeneracy (abortion, divorce, birth control, the sexual revolution, feminism in general) leading to the demise of Western Civilization as a whole. In this model, the Muslim takeover is just the wind that blows over our house of cards, and there's an underlying admiration of Muslim sexual conservatism there; strong Islamic family values will naturally defeat weak Western secular ones.
Anti-war rhetoric has also contributed its share to the panic; rhetoric about Western aggression inevitably making more terrorists is bolstered by overstating Muslim hostility worldwide, and accordingly I've noticed anti-war sources relying a little too credulously on sketchy reports of stepped-up terrorist recruitment among European Muslims since the beginning of the Iraq War. And arguments against democratization from the anti-war left nearly always feature alarmist predictions about any given group of Muslims alleged propensity to "elect Osama bin Laden" if allowed to vote. All through the Presidential election campaign last year I saw bits and pieces of rhetoric lifted from Imperial Hubris: How the West is Losing the War on Terror, an anti-war book by a CIA "expert" on Islamist terrorism that was harshly critical of the Bush administration. I can only hope that most who repeated its predictions hadn't actually read the thing; his basic theory is that nearly all Muslims are Islamists, so that our two options are to kill as many of them as possible (and he treats that as a serious option), or to completely withraw from all relations with the Middle East and wall ourselves off in a fortress America.
The notion that Islam and Arabs are inherently hyper-violent therefore serves many political agendas, which is perhaps why it seems to have solidified to such a degree across political affiliations. (Or maybe the fact that both groups mostly only turned up on the news when blowing stuff up in the 20 years or so preceding 9/11 made beliefs based on this stereotype easy to adopt).