Jonah Goldberg's new book is not of any more interest to me than was his last book, but I saw via Instapundit that he had posted an excerpt on the Crusades. That is a subject that interests me, so I read through what he had to say.
His general point is that the Crusades should be thought of as a kind of defensive war, rather than a kind of proto-imperialism. Further, he adds, rather than an affront to Islam they represent one of Islam's minor victories.
Let me offer you a different way of thinking about the Crusades.
Most of what you'll see written on the subject in popular sources will focus on either the First Crusade (characterized by its mystical vision of St. George, and apparently miraculous success in recapturing Jerusalem), or the Third Crusade (with the irresistible characters of Richard the Lionheart and Saladin). What we call "the First Crusade," though, wasn't really the first one at all.
If by "Crusade" we mean a war undertaken by Western fighting men who fought to capture land from Muslims in return for a spiritual promise from the Church that their sins would be expiated by the violence, we should look to 1063. The Pope at that time was Alexander II, who sent a bull to clerics in France to encourage French knights to join in fighting against the Muslims in what is now Spain. This is thirty years before the "First Crusade," but it was followed by several more.
The Papacy held that the Iberian peninsula was the actual property of St. Peter, and therefore belonged to the Church: a series of Popes from Alexander to the famous Urban encouraged one crusade after another to recapture the land and restore it to the dominion of the Pope. The kings of the Spanish kingdoms began to enjoy significant success, but of course they didn't wish to accept the domination of the Pope once they had captured the land. The Church eventually settled its claims in return for properties, chiefly granted to the new Crusader orders -- the Templars and the Hospitallers, that is. Less well known, though, were a whole series of Crusader knightly orders that were particular to the Spanish crusades, set up by the kings along the same lines as the more famous orders to fight in Spain.
The popes even went so far as to issue an order forbidding Spanish knights from going to the Crusades in the east, because they were needed to fight at home.
Now, if you factor in the Spanish crusade with the Eastern ones, the question of whether 'the Crusades' represent an Islamic victory looks a bit different. The Muslims eventually recaptured Jerusalem, and indeed Constantinople; however, they lost Spain entirely. Furthermore, the structures set up to conquer in Spain were largely transferable to the New World in 1492 -- that is, the year when the last Islamic lands fell in Spain, while Columbus opened the way west. The effect of the Spanish crusades was thus the conquest and conversion of the entire population of South and Central America; it would have been the conversion of the whole of the Americas if not for the religious wars that split the Christian faith.
In addition, to get a full appreciation of the Crusades you have to look at the ones internal to Europe, where they were about enforcing discipline and putting down dangerous heresies. The success of these was mixed -- indeed, the religious wars just mentioned could be seen as the final failure -- but they are also an important part of the picture.
Seen as a whole, the Crusades become a different picture. They were far more than an attempt to recapture lands from Islam, and far more successful than at first may appear. They didn't win everywhere, or for all time, but the strength and size of Christianity even today is directly related to their prosecution.
By the way, if you want to read a book on the Spanish Crusades, an excellent one is Reconquest and Crusade in Medieval Spain by Joseph F. O'Callaghan. His writing on medieval military organization and financing is somewhat general, but he puts together the history of events very well.