I wanted to dig up a few things which might help put Pope Benedict's speech about faith and reason in context.
First, here is a quote from Truth and Tolerance, Ratzinger's last book before he was elected Pope:
"To what extent the new surge forward of the Islamic world is fuelled by truly religious forces is equally open to question. In many places, as we can see, there is the danger of a pathological development of the autonomy of feeling, which only reinforces that threat of horrifying things about which Pauli, Heisenberg, and Fest have been telling us."
The above quote, like Pope Benedict's recent speech, was also on the subject of faith and reason; it comes from an essay, "Faith Between Reason and Feeling," and the portents of "Pauli, Heisenberg, and Fest" were that the division between objective knowledge and subjective feeling would lead to the breakdown of morality, with "horrifying" consequences. Shortly after those three wrote, the Holocaust happened.
But Ratzinger was not always critical of Islam, but rather sympathetic with the offense taken by Muslims against the atheism of secular Europe.
"Today, Islam is massively present in Europe. And there seems to be emerging a certain amount of blame on the part of those who feel that the West has lost its moral conscience. For example, whenever marriage and homosexuality are considered equivalent, whenever atheism is transformed into a right to blasphemy, especially in art, these facts are horrible for Muslims. Hence, the widespread impression, in the Islamic world, that Christianity is dying, that the West is falling into decadence, and the feeling that Islam alone brings the light of faith and morality. Some Muslims see in this an unbridgeable opposition between the Western world–and its moral and religious relativism–and the Islamic world." (Interview with Jean Sevillia)
But the self-same paragraph shows that Ratzinger has never had a simplistic view of Islam:
"To speak of a confrontation of cultures is sometimes correct: in the rebuke of the West we find the consequences of the past, when Islam was subjected to the domination of the European countries. We can thus reach the point of terrible extremes of fanaticism. This is one of the faces of Islam; it is not all of Islam. There are also Muslims who seek a peaceful dialogue with Christians. Consequently, it is important to judge the various aspects of a situation which is worrisome for all sides."
I would also point inquirers to the excellent article by Samir Khalil Samir, S.J.: "When Civilizations Meet: How Joseph Ratzinger Sees Islam".
From that article:
"On July 24, during his stay in the Italian Aosta Valley region, he was asked if Islam can be described as a religion of peace, to which he replied “I would not speak in generic terms, certainly Islam contains elements which are in favour of peace, as it contains other elements.” Even if not explicitly, Benedict XVI suggests that Islam suffers from ambiguity vis-à-vis violence, justifying it in various cases. And he added: “We must always strive to find the better elements.” Another person asked him then if terrorist attacks can be considered anti-Christian. His reply is clear-cut: “No, generally the intention seems to be much more general and not directed precisely at Christianity.”"