A good article from last week's NY Times about contemporary Islamic art - What Does Islam Look Like?
It mentions Karkhana and Shazia Sikander.
The [Danish] cartoon issue isn't primarily an art story, any more than the destruction of the mosque at Ayodhya in India was an architecture story, or the censure of "The Satanic Verses" was a story about contemporary fiction. It's a political story, an ancient and universal one, about how an image, and almost any image will do, once it is fused to cultural identity — Islam, in this case — can end up being used as a weapon.
As it happens, at the same time that intense partisan heat is being generated around the topic of popular images and Islam, we are getting a number of exhibitions of contemporary work to which the name "Islamic" is attached. Some shows approach the Islamic connection hesitantly; others embrace it. Together they tell us very different things about the reception of a cultural category called "Islam" in the West.