Pakistan and Islamic Extremists have long had a fairly cozy relationship, doubly so for their Army (a huge player in politics) and the ISI their intelligence service. They have worked with these extremists to fight the Indians (we can't tell them apart but they really hate eachother) in Kashmir and have probably worked together to cause some mayhem in India itself.
Since 9/11 countries have had to be pretty clearly for or against the above mentioned class of asshats and wisely Pakistan (really Musharaf) chose to be against them. For a long time however that was mostly theoretical. The Islamists would have liked to take over the country (where lots of people are at least passively supportive of them) but didn't have the power to do it. To the Pakistani governments credit nobody has really ever controlled their Northwest Frontier beyond a localized boots on the ground sort of way.
These two groups have been fighting something of a gentlemens war for awhile now. A few people get killed here in a car bombing and the Army blows up a compound there but all and all it was pretty limited warfare for very limited objectives. The Pakistanis needed to be able to show that they were at least trying to get tough and the Islamists just wanted to keep what they had and maybe expand it a bit, at least for now.
I think this gentlemens war (for lack of a better word, Islamist Terrorists are certainly not gentlemen) is officially over. Think of it as that point when two friends go from a somewhat friendly wrestling match to really scrapping and fight till someone gets badly hurt. Lots of bombs are going off and lots of Pakistani citizens are dying. I think the Pakistani goverment and military have really taken the gloves off.
They might not be the best equipped and most disciplined fighting force in the world but I personally think that a lack of will and complicity/ outright collaberation with the enemy were bigger issues than old gear and iffy standards of training.
I am not sure how increadibly stable Pakistan is. I would argue that the odds of a military coup at any point are reasonably high (not as high as in Coupland which is a small country in equitorial West Africa but a lot higher than its neighbors) but the name at the top changing wouldn't really matter all that much beyond symbolism. I do however think that Pakistan is in a situation where they can and may really do some damage to these asshats. I don't think they can completely stamp out Islamic Extremism in the region but they can sure make a safe havena lot less safe which could have big implications on the region.
Twill be interesting.