Dub,
I wouldnt give up on the Vatican just yet.
These guys have been in the power (and religion) business for quite a while and have managed many transitions generally fairly succesfully.
To me, in many ways the image of the barely alive pope hanging on to life for years on various tv screens epitomized the catholic religion worldwide.
They will get over the child abuse scandals, revitalize their leadership, and start to get their massive wealth and worldwide political strength working again to rebalance their position in the world.
Militant islam (islamofascism) is a threat to not only the Vactican but to all of us, and that will be one of the many cards that they will play.
But, overall, I do not see it as a threat that will be insurmountable, just very dangerous for some time.
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