The USIP report that Ted posted is interesting as far as it goes, but it doesn't really address the core issue of whether it is better for US policy to 1) support democratization even when it benefits critics/opponents (such as the Muslim Brotherhood in Egypt, or the MB/Islamic Action Front in Jordan), in the hopes that it contributes to greater stability (and Islamist moderation) in the long term, or 2) it is better to support authoritarian regimes instead, since they are known allies.

In the early part of the Bush Administration "Freedom Agenda" the former seemed to be the case. Now, the latter seems to be the case (as most dramatically evidenced by Washington's acquiesence in Mubarak's crackdowns against both secular and Islamist political opponents in Egypt).

One can make foreign policy arguments for both approaches. However, oscillating between the two is really the worst of all possible worlds: it first raises local democratic expectations, then dashes them in what is widely seen as a confirmation of US perfidy and ulterior motives.

As I've argued elsewhere:

Combined with other severe irritants in American relations with the MENA and its peoples—intervention in Iraq, the unresolved Palestinian issue, the excesses of the “global war on terror”—the effect has been to delegitimate the Washington as a credible bearer of democratic values. Indeed, in a 2006 Zogby poll of political attitudes in six Arab countries, 87% of Moroccans reported an “unfavourable” or “very unfavourable,” attitude towards the US, and none reported a “very favourable” attitude. As elsewhere in the region, Moroccans—and, one can safely assume, most others in North Africa— attribute this to differences with US policies, rather than US values. Strikingly, some 84% of Moroccans (along with 74% of Jordanians, 68% of Saudis, 61% of Lebanese, 55% of Egyptians, and 35% of Emiratis) believed that democracy is not a real American objective in the region.
Full (short) piece here.