There has been a bit of a crazed reaction to President Bush's use of the term 'Islamic Fascists' because it associates Islam with the terror and violence being threated around the world.
Aside from the obvious issues, namely to deny that the war on terror is originating from fanatical Muslims is just plain weird, I think it is a valuable term.
Whether he knows it or not, Bush clearly thinks within the matrix suggested by Religious Liberalism. Namely, you have religious liberals (like himself), religious totalitarians (or fascists), secular liberals and secular totalitarians.
By branding these Muslim radical as Islamic Fascists he has clearly placed them in one camp - and not his. It is, IMO, a perfect term. It is particularly useful because it does more than identify a group. You could just call them Islamic Terrorists/Militants/Resistance etc... What this term does, and why it has rankled so many feathers, is that is identifies the true nature of the threat. It isn't just terror per se (like anarchy driven terror), it is a belief in totalitarian government as defined by religious law - and terror as a tool to achieve that.
These terrorists wouldn't be nearly so threatening if all they wanted to do was blow up some buses so a strip of land would be given to them. What these terrorists want is the establishment of an Islamic state - EVERYWHERE. It is Islamic Fascism - a great term that hits the nail on the head.