Some good points.
Your enemy is never a villain in his own eyes. Keep this in mind; it may offer a way to make him your friend. If not, you can kill him without hate -- and quickly.
- Robert A. Heinlein/"Lazarus Long."
Given the rhetoric, proclamations, and behavior from al Qaeda before and since 9/11, I'm pretty sure we've got enough information to go on by now. There is no area of compromise between what they want and how civilized nations want to live. I think we're at the "kill them quickly" phase.
As you rightly point out, the real trick is keeping the uninformed cannon fodder from signing up with the psychotic leaders, and here's where "destroying the institutions and motivations" comes in. This problem goes beyond the borders of Afghanistan and Iraq. See also: democracy in the Middle East.