It is very important to understand "Islam" is not a religion as most of us in the Western world perceive religion. Islam is a complete system encompassing religious, political, legal, economic, cultural and military components. It is a total way of life dictated by the teachings of the Profit Mohammed and the Quran.

Is Islam a religion of peace? Consider the following:

Remember when your lord revealed to the angels, "Verily, I am with you, so keep firm those who have believed. I will cast terror into the hearts of those have disbelieved, so strike them over the necks and smite over all their fingers and toes." Quran, Surah 8:12

Then when the Sacred Months have passed, then kill the Mushrikun(1) wherever you find them, and capture them and besiege them, and lie in wait for them in each and every ambush. But if they repent and perform As-Salat(2), and give Zakat(3), then leave their way free. Verily, Allah is Oft-Forgiving, Most Merciful. Quran Surah 9:5

If the hypocrites, and those in whose hearts is disease, and those who spread false news among the people in Al-Madinah stop not, We shall certainly let you overpower them: then they will not be able to stay in it as your neighbours but a little while. Accused, they shall be seized wherever found, and killed with a terrible slaughter. Quran, Surah 33:60-61

Is Islam a religion of peace? It is as long as one is willing to submit to the injunctions of Allah and His Prophet. Otherwise:

Fight against those who believe not in Allah, nor the Last Day, nor forbid that which has been forbidden by Allah and His Messenger and those who acknowledge not the religion of truth (Islam) among the people of the Scripture (Jews and Christians), until they pay Jezyah(4) with willing submission, and feel themselves subdued. Quran Surah 9:29

Kind of like the wife beater that tells his wife: "I don't want to hit you. But it's all your fault. Just do what I tell you to do and stop making me mad". Islam tells the world: "I don't want to kill you. But it's all your fault. Just convert to Islam and we can live in peace".

While most Muslims may be a peaceful people, Islam is certainly not a "Religion Of Peace".

(1) Mushrikun: the idolaters, polytheists, disbelievers in the Oneness of Allah, pagans, etc.
(2) As-Salat: ritual prayers
(3) Zakat: obligatory act that Muslims must pay annually, to help the poor of their community
(4) Jezyah (Jizya): money, or tribute, that conquered non-Muslims historically had to pay to their Islamic overlords