I'm not Random Guy, but I'll give it a go.
If their minds are, as you say, already set in stone, why should we care if they percieve us as "weak" for acting more civilized? Why should our conduct be beholding to their standards? Do they dictate our behavior now?
The body of this arguement assumes the entire muslim world to be "Islamofanatical". Read the NIE report. Most muslims don't like the idea of living under Sha'ria law (sp?), but they hate foreign imperialism even more. Diplomacy is meant to win THEM, not the terrorist, to our cause. Unfortunately, our military occupation of Iraq, along with piss poor rhetoric on the part of this administration ("crusade!", "Your either with us, or you're with the terrorists!"), as well as Abu Ghraib, secret prisons, Gitmo have the effect of convincing everyday muslims that we really are at war with islam. Our "delivery" certainly matters to them. How we "deliver" democracy will make the difference in how they regard the "substance" of western democracy.
A bigger problem than the usual conflation of the Iraqi occupation with the rhetorically ruinous "War on Terror" is your conlfation of Islamofascist/Islamic Extremist/Jihadist/whatever-the- -you're-calling-them-this-week terrorists with muslims who oppose our military occupation. According to the Bush Administrations infintile binary thought process, "They're not with us, so they're with the terrorists", which forces muslims to choose sides, and many of them aren't going to side with a foreign occupier. To paraphrase a quote "It's better to be ruled by your own bad government than a good foreign government".
So obsess over fanatical terrorists all you want, my concern is the hearts and minds of muslim who are can be won over if our foreign policy is executed with more care than it has been so far. The sooner this administration realizes that THEY are the prize, not Iraqi real estate, the better.