I'd been quite enjoying the recent South Park satire about the to-do over publishing pictures of Mohammed, and I was very disappointed to discover near the end of the two-part episode that, quoting the show, Comedy Central decided to "puss out" and forced them to censor the image because they were afraid. The show mocked the network in its typical offensive-yet-compelling fashion by broadcasting images that were apparently more acceptable to the executives:
The uncensored depiction of Mohammed is described in the episode by an animated President Bush as not being in itself derogatory: “Hey, that wasn't bad at all. They just showed Mohammed standing there, looking normal."
In the episode, Al Qaeda then retaliates by broadcasting its own cartoon showing Americans, President Bush, and Jesus defecating on each other and the American flag.
Defenders of Comedy Central argue that it regularly allows South Park and other shows to “push the envelope,” with far more lax controls than almost any other cable network.
On the other hand, critics of the network have pointed out that showing “Mohammed standing there, looking normal” is not allowed, while showing Jesus defecating on President Bush and the American flag is permitted.
At the link above Jim Lindgren has a lot more background. It's sad to see threats of terror be so transparently effective.
Everything Between points out something I vaguely remembered, namely that South Park has already broadcast an episode featuring Mohammed; first shown in 2001, "Super Best Friends" depicts Mohammed, Jesus, Buddha, Krishna, Joseph Smith, Lao Tsu, Moses, and Sea Man in their never-ending battle against the evil power of street magician David Blaine.
Mohammed showing off his flame powers, courtesy of Wikipedia and South Park.