The Jamestown Foundation's Terrorism Monitor, 5 Oct 06:

Pakistan's Peace Deal with Taliban Militants
...Anticipating the "bright future," Pakistan set out to build bridges to the Taliban. The September 5 peace deal is the first major step in this direction. Musharraf is now painting the Taliban as a popular resistance movement. On September 11, he told an audience in Brussels: "The center of gravity of terrorism has shifted from al-Qaeda to the Taliban," which "has its roots in the people" (Dawn, September 12). The Afghan government, however, was quick to reject his revisionist view, dismissing the Taliban as "a creation of Pakistan" (The Nation, September 13). Musharraf's thinking on the Taliban, however, does not square with his policies. In Kabul, he asked the Afghan government, "Let's fight the Taliban together" (Daily Jang, September 11). Yet, why does Musharraf make peace with the Taliban if he wants to fight them?

These contradictions reflect Musharraf's desire for Pakistan to be seen as a frontline state in the war on terrorism, which left it $20 billion richer by 2003. Most recent estimates, which have been widely circulated in the Pakistani media, show that Pakistan has cashed in $50 billion (half of its GDP) in grants-in-aid, soft loans, debt write-offs, debt-rescheduling, preferential terms of trade, selective investment and remittances between 2001 and 2006. While Islamabad is realigning its strategic interests with the resurgent Taliban, it certainly does not want to lose billions of dollars either, which have continued to flow in its direction since 9/11. Hence, Islamabad stands by the Taliban and fights them too.
...and, for a different perspective, from the International Relations and Security Network:

Pakistan Toys with New Strategy on Border
...Pakistan's military president General Pervez Musharraf has embarked on a new strategy designed to chip away at the Taliban insurgency by standing down the army and seeking to win the hearts and minds of the country's North Waziristan tribal agency, which borders Afghanistan.

The deal, announced earlier in September, has seen the some 80,000 Pakistani military troops deployed in North Waziristan reduce their profile and allow some local militia forces to take over the manning of some checkpoints in the area. The deal has also seen the release from custody of some tribal militants captured during the Pakistani military's recent operations in the region.

Reports also say the local tribal leaders have reciprocated by pledging to lower their profile as well, and to ensure that Taliban forces do not infiltrate the border from Afghanistan.

Musharraf believes that by standing down military troops and working toward reconstruction and development in the area, the tribal population - traditionally sympathetic to the Taliban - could shift its loyalties and work towards securing the border area...