His reflections can be found here (in German) and here in their english translation. But contrary to what is written in the Herald Tribune as summary

On Tuesday, Benedict delivered what some church experts said was a defining speech of his pontificate, saying that the West, and specifically Europe, had become so beholden to reason that it had closed God out of public life, science and academia.
He began his speech at Regensburg University with what he conceded were "brusque" words about Islam: He quoted a 14th-century Byzantine emperor as having said: "Show me just what Muhammad brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached."

The pope then used the word jihad, or holy war, saying that violence was contrary to God's nature and to reason.

and reaction of its by Muslim critiques like this one:

I don't think the church should point a finger at extremist activities in other religions," Aiman Mazyek, president of the Central Council of Muslims in Germany, told the newspaper Süddeutsche Zeitung, pointedly recalling the Crusades, the Spanish Inquisition and the Vatican's relations with Nazi Germany.

are both off the mark. The tribune does not provide a proper context (they obiviously did not read the speech either) and put word into the Pope's mouth, where he is obviously quoting and providing a summary of the emperors thoughts on the matter

The emperor, after having expressed himself so forcefully, goes on to explain in detail the reasons why spreading the faith through violence is something unreasonable. Violence is incompatible with the nature of God and the nature of the soul. "God", he says, "is not pleased by blood - and not acting reasonably is contrary to God's nature. Faith is born of the soul, not the body. Whoever would lead someone to faith needs the ability to speak well and to reason properly, without violence and threats... To convince a reasonable soul, one does not need a strong arm, or weapons of any kind, or any other means of threatening a person with death...".

and Aiman Mayzek might have only been given the quote and nothing about the context as well.

So here is how I see the whole thing:
While the Pope was thinking about what to say about Faith and Reason he happened to read a book about something completely different.

I was reminded of all this recently, when I read the edition by Professor Theodore Khoury (Münster) of part of the dialogue carried on - perhaps in 1391 in the winter barracks near Ankara - by the erudite Byzantine emperor Manuel II Paleologus and an educated Persian on the subject of Christianity and Islam, and the truth of both...It is not my intention to discuss this question in the present lecture; here I would like to discuss only one point - itself rather marginal to the dialogue as a whole - which, in the context of the issue of "faith and reason", I found interesting and which can serve as the starting-point for my reflections on this issue.

He is using this dialog as a starting point to discuss the relationship between Faith and Reason and how this changed over the centuries. Could he have used a different example? Most probably, should he not have used this, possible.

There are further indications that he is not interested in bashing Islam:

For the emperor, as a Byzantine shaped by Greek philosophy

In a way it is funny and ironic, a reflection on belief and reason, that is not being lead reasonably...

Oh, and what he really wants to say?

The positive aspects of modernity are to be acknowledged unreservedly: we are all grateful for the marvellous possibilities that it has opened up for mankind and for the progress in humanity that has been granted to us. The scientific ethos, moreover, is .... the will to be obedient to the truth, and, as such, it embodies an attitude which belongs to the essential decisions of the Christian spirit. The intention here is not one of retrenchment or negative criticism, but of broadening our concept of reason and its application. While we rejoice in the new possibilities open to humanity, we also see the dangers arising from these possibilities and we must ask ourselves how we can overcome them. We will succeed in doing so only if reason and faith come together in a new way, if we overcome the self-imposed limitation of reason to the empirically verifiable, and if we once more disclose its vast horizons. ... as theology, as inquiry into the rationality of faith.

(all the bold text is my emphasis)