There was a Muslim riot in Sydney last week because of this film. Police officers and citizens were injured, there was a four-year-old holding up a "behead all those who insult the prophet" sign (there were calls afterwards for that child to be removed from its parents but, predictably, nothing happened) and very nearly riots in Melbourne too (thankfully they didn't end up happening).
Journalists were going around interviewing some of the rioters and found that many of them hadn't even seen the video (some even refused to watch it because it was too offensive, which is kinda circular logic (then again, they're religious so that doesn't surprise me)). Honestly I think some of them just wanted an excuse to riot and feel powerful. I mean, how does a low-budget (and terrible) film made in another country even constitute a peaceful protest, let alone a riot?
Edit: Obviously some of the Muslims there were protesting peacefully, I don't mean to generalise.