From a Catholic Christian point of view, is it the grave sin of blasphemy to insult Mohammed or Islam? Yes, it is.
There are two ways to commit blasphemy: directly or indirectly. Direct blasphemy would be any thought, word, or deed that insults God himself. This grave sin has, as its proximate end (its morally-immediate end) the expression of insult, denigration, contempt, or anything similar toward God himself.
But one can also commit blasphemy indirectly, by insult to persons, places, or things that are close to God in holiness: the Church, the Saints, the Pope, the Bible, the moral law, as well as any sincere belief in God, any holy prayer, and any good works toward those in need. For all that is good and holy is a work of God.
The Catechism of the Catholic Church (n. 2148) condemns both types of blasphemy:
Direct: “Blasphemy is directly opposed to the second commandment. It consists in uttering against God – inwardly or outwardly – words of hatred, reproach, or defiance; in speaking ill of God; in failing in respect toward him in one’s speech; in misusing God’s name. St. James condemns those ‘who blaspheme that honorable name [of Jesus] by which you are called.’ ”
Indirect: “The prohibition of blasphemy extends to language against Christ’s Church, the saints, and sacred things. It is also blasphemous to make use of God’s name to cover up criminal practices, to reduce peoples to servitude, to torture persons or put them to death. The misuse of God’s name to commit a crime can provoke others to repudiate religion.”
Blasphemy is intrinsically evil and always gravely immoral: “Blasphemy…is in itself a grave sin.” (n. 2148)
Is it blasphemy to insult Christianity or the Saints? Yes, it is. For Christianity is the truest form of religion, and Christians worship the one true God, who created heaven and earth. And the Saints are cooperators with God in works of religion, morals, and salvation. To insult Christianity or the Saints is to insult God.
Is it blasphemy to insult Judaism or Moses or Abraham? Yes, it is. For Judaism is true religion, and Jews worship the one true God, who created heaven and earth. And Moses and Abraham are cooperators with God in the work of the holy Jewish faith. To insult Judaism or Moses or Abraham is to insult God.
Is it blasphemy to insult Islam or Muhammad? Yes, it is. For Islam is true religion, and Muslims worship the one true God, who created heaven and earth. And Muhammad is the prophet of Islam, the leader of the faith for all sincere prayerful Muslims. To insult Muhammad or Islam is to insult God.
(I am not here referring to violent extremists, who feign the worship of God, but who really are worshiping violence and power. They seek only their own glorification. They do not give glory to God.)
Judaism, Christianity, and Islam are the three great monotheistic religions of the world. The deliberate choice of any thought, word, or deed insulting to any of those three religions is indirect blasphemy against God.
See my post: Roman Catholic teaching on the Islamic Faith
(added 14 Nov 2012)
It is not a true insult to Islam or Judaism or Protestantism or Catholicism to point out the faults or sins of particular individuals, to disagree on matters of faith and morals, or to criticize aspects of a non-Catholic religion that are in error. Neither is it an insult to criticize a Pope if he errs or sins, or to disagree with a non-infallible teaching of the Magisterium — as long as one has sufficient basis in truth. So it is not blasphemy if a Pope or anyone else points out the errors in other religions, or the sins of particular persons of any religion. (But it is an error to treat every expression by every Pope as if it were infallible.)
What is indirect blasphemy — and this is all too common today — is to treat Jews or Protestants or Muslims as if they were necessarily condemned to Hell, to treat the Jewish, Protestant, or Islamic faiths as if they were not worshiping the one true God, or as if they were not worthy of respect for all that is true and good in their respective religions. Furthermore, it is the grave sin of heresy and schism to reject the teachings and authority of the Second Vatican Council. See my article: Is it heresy to reject the teachings of Vatican II?