The United Kingdom ought to be able to knight whoever they deem merits the distinction. Ignorant, dark aged, fanatical bigots can whine all they want about it - western societies should NEVER give in, abet, or change their fundamental values for these degenerates.
Congratulations, Salman. 
Bravo! He is one of the most accomplished men of letters of the past half-century. One of his first novels, "Midnight's Children," won not only the Booker Prize, the biggest prize in publishing, but the "Booker of Bookers," the best book to win the prize in 25 years.
When Khomeini declared
fatwa against Rushdie, many novelists and artists defended him publicly. Many religious leaders and politicians suggested he had it coming, because of his book "Satanic Verses."
In this book he poetically expands verses of the Koran that inspired his imagination. Apparently Mohammed gave a bit of leeway to polytheists, despite the strict monotheism of his religion. Later, he publicly renounced his tolerance, declaring those verses to be satanic, and not dictated from Allah. Rushdie wonders in his novel, what if all the verses are satanic? Or, what if there is no difference between the satanic and the divine?
The
fatwa was declared for depicting a Mohammed-type character in literature, which is against the religion (he also named him Mahound, which was a derogatory name for Mohammed), for suggesting the Koran might be satanic, which is definitely a no-no, and finally because Rushdie himself had been born Muslim, and left the faith, which is a sin punishable by death.
To those that suggest this is deliberately to inflame, I seriously doubt that can be possible, since he is one of the most accomplished British citizens in any artistic field. But if it does inflame, so much the better, because it makes those complaining out to be the barbarians they are. Any author can freely write a book questioning the divinity, lineage, etc of Jesus, and it should be the same with Mohammed. We should not treat any religion with condescension, saying, we don't want to hurt your feelings. We should question them all equally.
Walter Ramsey