When your neighbour is a terrorist...
Whether we like it or not, tolerence is part of those modern values that come about with the globalization of thought and ideas... but whether we like it or not, tolerence is being tested to the fullest by the infiltration of extreme religiosity and pre-modernism into societies where modern values dominate.
Admittedly, I am probably wildly diverging from the "liberal atheists" on this issue, as I am an elitist through and through, and see tolerence as, at best, mindless liberal conformity. However, I don't subscribe to the equally mindless claims of superiority of religious extremists. Being part of one religion as opposed to another is no merit at all - it is an accident of birth. Religious structures turn natural aristocracies into arbitrary spectacles.
So while I am against tolerence, I absolutely despise religious structures and religion-based intolerence. Because I am so much more on the side of tolerence (and because I'm sure most of my readers are), I want to look at tolerence in this entry from a more positive standpoint and why it is superior to religious intolerence.
Firstly, what is tolerence about ? Well, if we are to take part in a society, we must refrain from violence against each other, and we have to accept the existence of their values, ideas and beliefs and view them all benevolently, even if we disagree with them, at least according to the value of tolerence. And to a certain extent this is true. Civilization, after all, is based on the premise that cooperation is better than isolation, that trade and specialization are better than self-sufficiency, and that progress is better than stagnation.
On the other end of the scale, you have religious extremism, which holds that the believer should only interact with people who share his cult, sect or religion - marry within their sect, trade within their sect, have friends within their sect, keep knowledge of crimes within the sect. Religious extremists love to isolate themselves from the rest of society - which they consider corrupt - and promote intolerent ideals. In extreme cases, like the Amish or the Mennonites, profound isolation is promoted, unless the unbeliever wants to buy wood furniture.
In this process of isolation, they exclude themselves from the larger society on which they depend. Complete isolation is extremely destructive, in that it drastically restricts the available resources in any field, and thus may limit the individual's value expression in unacceptable ways. So most sects seek to co-exist with the larger society but suppress its elements which are most dangerous to the sect. And that is when we get into the problem of religious intolerence.
Now you've got two basic organizational scenarios. Either you have an exploitative ruling class in place, or you don't. Now most modern societies have a ruling class, and we can't imagine living any other way, although this was not always the case. Nowadays we think the ruling class is great because we get to choose who we want to exploit us on little pieces of paper, but once again this apparent legitimacy is a relatively recent invention. Either way, these are your two basic alternatives.
Most countries have a democratic ruling class. In such a case, religious intolerence is a natural extension of the social warfare that is inherent to any democratic system, and sects become one of the many groups vying for government favours and government power.
They are, however, different in a few respects : unlike most other interest groups in a democracy, they seek nothing more but the complete reform of society, their whole lives are consumed by this quest, and they are also consumed with the desire to persuade or intimidate others to join their group. This is why we fear Islam might attempt power grabs in Europe but not, say, feminists, or farmers, or construction workers. For one thing, these groups, however irrational, are inherently limited in scope and fanaticism. Religious activists are not.
Now let's look at the case of a society without a ruling class. Without government to impose a singular value system, people are free to trade with anyone in the manner they desire. In such a case, tolerence will tend to be selected for, since there is more profit in trading with anyone, than in limiting your pool of customers. When in freedom there is a strong incentive to keep one's beliefs to oneself.
But religion defeats this incentive, because religious fanatics believe that material values are unimportant compared to (and even hostile to) their eternal salvation. Therefore a religious fanatic living in a free society would still have a strong incentive to discriminate, denounce and murder. In this breadth of scope, once again, religion is a rare specimen.
People who are religiously intolerent and yet persist in living in society are like "Christian pharmacists" who refuse to fill out prescriptions - they are barking up the wrong branch. If you disagree with the fundamental reasons for something to exist, then the most sensible thing to do is to not participate in it. Thus, complete isolation seems to me the most reasonable religious alternative.