I am by no means an expert on the subject, but I have read a good deal about Islam and the Middle East, speak Arabic, and generally "get" the area better than the average American. So, what course of study would I recommend to the Average American interested in increasing his/her area knowledge? Sticking with good ol' ink and binding books (although there are many great online sources or articles - that may be another post), here goes:

1st Semester:

No god but God: The Origins, Evolution, and Future of Islam, by Reza Aslan
A recent contribution (2005), this book is accessible enough for someone who doesn't know a Sufi from a Sunni, but won't bore someone with a higher level of knowledge. Aslan is a moderate Muslim, Persian in origin, living in America. As a basic overview of Islam, this book does a remarkable job, utilizing a unique and helpful dual topical/chronological ordering. As a sole source of higher commentary, it's a bit weak, and undoubtably many Muslims would disagree with Aslan's characterization of the splits between the various sects. Aslan also claims that Islam is ripe for a Reformation, along the same lines as the Protestant Reformation, and his book is partly a call for continuing dialogue between the different sides (roughly modern/moderate and fundamentalist.) This claim is much more at debate than Aslan portrays, but his claims shows that at least one side (his side, the moderates) are willing to debate the "soul of Islam."

Arabian Sands, by Wilfred Thesiger
Thesiger's work is a classic in Arabian studies, and is out in a re-issue this year. One of the first Europeans to travel in the heart of Arabia, Thesiger crossed the Empty Quarter with Bedouin guides in the 1950s. This book reads like a James Michener novel, and describes both the unique desert way of life and the complex tribal politics in the region. Perhaps its most valuable function for a modern student is to give a baseline for understanding a style of Islam and living just 50 years ago, without which it is difficult to appreciate just how rapid and core-shaking the change has been in the Middle East with the discovery of oil and influx of the West.

The Shia Revival: How Conflicts within Islam will Shape the Future, by Vali Nasr
Nasr is one of the preeminent scholars of the Middle East today, and his book The Shia Revival is his most popular for a reason. It deals with an overarching theme in the modern Islamic world: the divide and struggle between Shia and Sunni Islam. Nasr brings the student up to speed, covering the historic divisions between the two branches of Islam, the rise of secular nationalism, the Shia backlash against secularism in Iran, and the (possible) rise of Iraq as the first Arab Shia nation. Nasr's premise of a Shia ascendency is well argued, but he may have a tendency to explain all issues in the Middle East as reflecting this struggle, sometimes ignoring more local concerns. This book excellently bridges the gap between history and current events, along with giving a possible future.

And now you're ready for
2nd Semester:

Islam in the World, by Malise Ruthven
Ruthven covers what Aslan ignored, and then some. I only recommend this book if you're seriously interested in understanding the complexity of Islam, and have some time to devote to the study. If that's you, then this is the book. Ruthven outlines the history of Islam and its cultural context, from the Prophet to today. He also discusses the finer points of the difference between the sects of Islam, not only discussing historical factors but also differences in theology. This book also examines the political interplay between Islamic scholars and the state throughout history, and briefly covers Islamic economic principles. If any of these areas interest you in particular, Ruthven also provides an extensive "further reading" list.

A Peace to End All Peace: The fall of the Ottoman Empire and the Creation of the Modern Middle East, by David Fromkin
This book details the effects of colonial ventures into the Middle East, from the late 1800s through WWI, especially dwelling on the Palestinian issue. (By the way, if you're interested more particularly in the Palestinian Issue, check out Palestine and the Arab-Israeli Conflict, by Charles Smith.) The lines of the modern states in the region are often the result of British or French colonial concerns more than an accurate reflection of the local situation, and Fromkin here shows why. To the modern student, this book highlights the difficulty of attempting to impose sudden change upon the Middle East (not that any examples come to mind...).
Along the same topic, but with more modern updates, try Bernard Lewis' What Went Wrong?. Like Fromkin, Lewis covers the fall of the Ottoman Empire, but he covers a broader historical period and attempts to explain the current situation in the broader Muslim world in terms of the "clash between Islam and modernity."

So, there you have it. What books would you add to this course, or subtract?