This is a stupid thing to excerpt.
Read the whole thing... it has NOTHING to do with that small excerpt.
Here is the official transcript:
Faith, Reason and the University
http://www.vatican.va/holy_father/benedict_xvi/speeches/2006/september/documents/hf_ben-xvi_spe_20060912_university-regensburg_en.html
Here is what an official spokesman for the Vatican said:
http://www.freerepublic.com/focus/f-news/1702933/posts
His address was to REPRESENTATIVES OF SCIENCE, not theologians or reporters or politicians or "the common man" and it was extolling academics to stop marginalizing religion. It had nothing to do with Islam.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus
Right and wrong. The discussion of Islam is central to his message - that Christianity is based on Logos.
It places Christianity in the middle - not reasonless like Islam (see the excerpt) but not pure Godless reason like science.