What are the possible scenarios in current muddy waters where all fight against all without any rules?
It's difficult to predict as many factors are unknown entities - the Pakistan army and state cohesion, the strategy and determination of militants and American intrigues.

On the first I cannot say anything as for now nobody seems to know the real state of affairs. Analysts say in predominantly Punjabi army there are 18 to 25% Pashtuns and few percents of other minorities. Separatism of Baluchis and Sindhis remains strong but nationalist outfits were largely banned by authorities. There are indications that Mush's ruthless actions against media (on his insistence the Gulf monarchies from where they operated after imposition of Emergency blacked them out) were prompted by spectacular setbacks in Swat and other North Western Frontier regions. Mush fears that army setbacks will fuel separatism and will break his army on ethnic lines. In the past there were 3 Bengali mutinies which resulted in separation of Bangladesh.

On second I quote the short article from Outlook and you can draw your opinion.

Not too long ago, the picturesque Swat valley in the NWFP, with its rolling hills, gushing streams and scenic vistas, was described as Pakistan's Switzerland. But suicide bombings and steady erosion of state authority over the years, and particularly in the last few weeks, have now made this idyll a zone of conflict where radical Islamists are pitted against the Pakistan army. Ever since the latter began its operation here, beginning October 22 this year, 65 Pakistani soldiers have been killed, and radical Islamists are in control of six of its eight tehsils (revenue divisions).

Leading the charge against the Pakistan army and fast emerging as its nemesis is Maulana Fazlullah, who heads the banned Tehrik-e-Nifaz-e-Shariat-e-Mohammad (TNSM), or Movement for the Enforcement of Islamic Shariat.

In Pakistan, though, he has become famous as Maulana Radio, earning this sobriquet for the illegal FM radio channel he operates. Through his broadcast, yet another example of anti-modernity forces using modern means of communication to spread their antediluvian ideas, Maulana Radio has been inspiring followers to implement Islamic Shariat, fight the Pak army, and establish the authority of Islam. The 1.6 million people of Swat district tune in to listen to him, his popularity surpassing that of any Pakistani DJ.

Fond of riding a black steed and always sporting a black turban--his followers are actually called Black Turbans--Fazlullah, 32, has never had his photograph taken, believing that Islam forbids taking pictures of human beings lest it becomes the first step to idol worship. The essence of his agenda is in the motto: "Shariah ya Shahadat (Islamic laws or martyrdom)". On his FM channel, he warns parents against sending girls to school unless they observe full purdah. Barbers have been ordered not to shave beards, and shops proscribed from selling CDs and music cassettes. He recently ordered his followers not to administer polio drops to their children. Reason: the polio drop is part of an American-Zionist plot to render them sterile.

His rantings are typical of those subscribing to the intellectual tradition of the Taliban. But Maulana Radio's pronouncements have a sinister edge because he commands thousands of followers armed to their teeth. His Shaheen Commando Force dispenses summary justice, regulates traffic, and patrols villages and towns. The government accuses him of establishing a parallel administration. But in an interview to The News, conducted before the army operation began, he denied the charge. "This is not true," he said. "We did arrest some killers, drunkards and other criminals and would have delivered them over to the police had the cops been doing their duty.... The murderers are still in our custody and the seven students who were caught drinking were released after they sought forgiveness from Allah." He admitted some criminals in his custody were lashed publicly, but justified it saying they had dressed themselves as Taliban to rob people. "I believe the lashing would serve as a deterrent to others." Fazlullah also denied the charge that his men were behind the attempted destruction of the Bamiyan-like Buddha carved in the rocks of Jehanabad in Manglawar village, saying an Islamic state should protect non-Muslim religious sites.

Fazlullah's rise has been a roller-coaster one. It wasn't he but his father-in-law, Sufi Mohammad, who established the TNSM. Sufi and TNSM functioned in relative anonymity until the Americans invaded Afghanistan in November 2001, prompting him and Fazlullah to take 10,000 men into Afghanistan to join the resistance there. The Taliban were overthrown, a large number of TNSM volunteers were killed, and a crestfallen Sufi returned to Pakistan where he was arrested and tried for terrorism.

He, however, refused to fight the case arguing he didn't recognise non-Islamic courts. Awarded life imprisonment, Sufi languishes in a Dera Ismail Khan jail.

Fazlullah was luckier--he was released after 17 months in prison. But he could not revive the TNSM immediately because the Musharraf government's ban on the organisation in January 2002 had driven its activists underground. The TNSM had also lost popular support because its Afghan misadventure resulted in the death of hundreds of youngsters from Swat. Then came the devastating earthquake of October 8, 2005, enabling Fazlullah's TNSM to recover lost ground by organising commendable relief work. Simultaneously, he deftly exploited the sentiments of those who saw the quake as a divine retribution for their sins. Even as TNSM activists provided succour to people, they convinced them to burn their invaluable TV sets lest they incur Allah's wrath again. Not only did he bring Swat under his sway, his influence spread to the adjoining Malakand district and the Bajaur Agency of the Federally Administered Tribal Areas (FATA).

The US occupation of Afghanistan roiled sentiments here, further bolstering TNSM's support base. Sources in intelligence agencies say jehadi groups, including the TNSM, provided sanctuary to militants operating in Afghanistan. This prompted the Americans to fire a missile at the TNSM seminary in Bajaur on October 30, 2006, killing 82, including seminary head Maulana Liaquat. His elder brother and TNSM leader Faqir Mohammed promised to avenge the killing of innocents. Response was swift: a week later, a suicide bomber blew himself up at a Punjab Regimental Centre training school at Dargai, near Peshawar, killing 45.

The retaliation boosted the TNSM's popularity. Riding its crest, Maulana Fazlullah appealed on his FM channel for donations to build a TNSM madrassa in Iman Dheri. The people of Swat and adjoining areas contributed Rs 38 lakh in just 24 hours. Spread on the bank of the river Swat, the madrassa is 80 per cent complete; the amount collected: a whopping Rs 35 million. Emboldened, his organisation established a veritable parallel administration in several tehsils, taking down the Pakistani flag and replacing it with a white pennant.

When the Pak army began its military operation, Fazlullah asked his people over the radio to resist the soldiers deployed to kill the innocent. Three days later, two suicide bombers rammed their car into a military truck in Mangora, killing 33 soldiers. At least 10 security personnel have been beheaded publicly.

But human rights activist Asma Jahangir, currently in custody, says she isn't impressed by the Pak army's attempt to wipe out the TNSM, saying the battle in Swat echoes the bloody firefight against the radical maulanas of Islamabad's Lal Masjid--the state spawns the Islamists to achieve its goals and crushes them at its convenience. She and others note another irony: the army flounders in Swat but flexes its muscle against the media and unarmed civilians opposed to Emergency. Not really the prescription for tackling radical Islam.

It's clear they aim to overthrow Musharraf regime and setting in Pakistan Taliban style government.

On third it is just my guess. I think Americans almost gave up on Musharraf and count on palace coup with another general at the helm with or without Benazir as a curtain. The web of spies is working overtime and there is increasing political pressure to Mush to doff his uniform (this may be precondition set by any general to start negotiations with Americans).
Musharraf understand this perfectly and is unlikely to sign his own death warrant, he will fight till whatever end and will bring Americans down with him.

You can check what knowledgeable American expert have to say.

The talks about similarities between Iranian Shah and Musharraf are premature at this point of time but chances for Islamic revolution are looking increasingly good. Why? Americans should know this better. They entered with bin Ladin in Faustian bargain and bogged down Soviets in Afghanistan. The resurrection of Taliban is inevitable in context of NATO continuing operations in Afghanistan. Musharraf and elements in ISI tried to save what was left of Al-Qaeda (he took some cosmetic measures and terrorist outfits simply rename themselves and still function) but Americans targeted the terror infrastructure in NWFR. These actions with heavy collateral civilian casualties generated the wave which Maulana Radio and likes are riding upon. They found in military ruled Pakistan the fertile ground for growth. Possibilities for remedial measures like dialogue with Pashtun and Baluchi nationalists to confront Islamists are remote.

Maybe you wondered why I did not mention mainstream political parties like Bhutto's PPP and Sharif's PML (N) at all. They were sidelined in the course of events and unlikely to gain from the current crisis. Neither Bush's emissars nor Mush do not believe in their abilities to fight with Islamists terror. Benazir and Nawaz hope with campaign of civil disobedience and protests they will succeed in ouster of the General but these protests will certainly be brutally suppressed. The slim chances for them are to be in the right place in the right time if Americans will succeed in palace coup to provide respectable curtain for ill-named war on terror.

What about Ahmadinejad? Why he shouldn't lose his sleep? Though neocon plans about Iran I believe are very much in place and there will be stronger efforts for new UN sanctions, chances for military confrontation and invasion in the wake of Pakistan's crisis diminished. As Bush's sponsored Musharraf regime is seems breathing its last there are desperate efforts to prevent new Islamic revolution next-door.

Instead of conclusion. What is my take on this situation? The mix of reasons behind the ongoing crisis is complex and there is no easy satisfactory solution in sight. Possibilities for withdrawal of Western troops from Afghanistan are nil. Chances for federal set-up in Pakistan are nil. Chances for Mush quitting army post are remote. Opportunities for sooner Parliament elections are remote (though it will depend on Benazir bargain with Mush). The stage for either palace coup or for Islamic revolution is set.