I don't think that Egypt is going to change as much as some of you seem to expect. Mubarak's time is definitely up, but revolution? If thn military refuses to fight the people, that's it... the police (by accounts) have already fled, and their various stations and headquarters ransacked.
It comes down to what the Egyptian people want, how much they want it, and in the end it all comes down to whether or not the military will move from a protective role, and begin to kill their own people...
...remember, that is NOT what they signed up for, but we'll see.
I also don't see that this can be leveraged into an "islamic revolution"... that's just not what's on the street from what's being reported.
I think this represents a period of (violent) turmoil, but I don't think that Egypt is anywhere near total implosion. Oh, and I'm guessing that Israel is thrilled: what's new?... they're still surrounded by enemies, but at least they don't have to worry about this populist revolt spreading!
Now the other Arab nations, according to accounts by their diplomats via Fareed Zakaria (in Davos), are essentially scared "poop"less. If this can happen to Egypt, there isn't a single Arab nation that can count on their stability right now.
In the midst of all of this, added to the continued failure of the Palestinians to re-establish a credible government and the Israeli's willingness to sit behind a wall (it's working pretty well) is no longer as hot a topic. You can't exactly say that the middle east is uneasy because of Jerusalem when you have populist uprisings that are very much home-grown and concerned with domestic issues.
I think, finally, the issue of the Palestinian people has been openly acknowledged to be what it is: they've been pawns, and now they're nothing. I don't mean this as a reflection of my beliefs, but as WhoWee points out... that canal is not a joke.