If scientists have discovered a gene that recognizes sarcasm, then it follows there must be similar genes that fail to recognize satire, or at the very least, irony. Apparently religious fanatics of all stripes must be missing this gene. I finished Satanic Verses, and while I would not for a moment suggest that Rushdie is not challenging rigid Islam--he certainly is no Koranic literalist--his "blasphemy" is mitigated by the fact that he is writing satire, denouncing religious violence and sectarianism, and by extension the other evils that heap up when religion is used as a tool against certain elements of society in order to retain or build up one's own, very earthly, power. Within the structure of the novel, the sections that really must have set the Fatwa in motion--scenes involving the Prophet, for instance--are the dreams of the character Gibreel Farishta, an aging, narcissistic Bollywood star who is howling mad--believing himself first to be the Angel Gibreel (revelation) then Azraeel (the destroyer). At the end of the novel, he commits a double-murder, then a suicide. Hardly a ringing endorsement of his views of the Prophet. Of course you have to read to the end: first problem. Then, of course, you have to sympathize with the broader vision: second problem--if you're an Ayatollah. Not so much if you're just a reader. More than that, and I will be preaching to the choir.
There are lots of ambiguities in the story, the rational is mixed with irrational, demons sometimes act like angels and vice versa. I thought the end was very touching--a reconciliation of sorts between a father and son that I didn't really see coming. Rushdie's concern with the sectarian violence in India and Pakistan, and where such movements were inevitably headed is all too familar today, nearly twenty years on. Rather depressing. As always the beauty of his imagery, the power of it, is compelling by itself. He has a gift for mimicry and writes dialogue to die for.
For some excellent notes and other resources for Satanic Verses, try this link. I haven't had time to look through all of the material, but it looks very good.