Islam and democracy

Regular readers of Rational Islam? will know the background to the genesis of this blog: a close friend converted to Islam in his late twenties and promptly declared that among other things:
i. evolution was a lie
ii. Adam and Eve were the first humans
iii. the ancients lived to hundreds of years old
iv.desert sprites called jinn actually exist
v. the Qur'an contained miraculous scientific miracles which prove its divinity.

Each of the above in its own way is worrying to hear from an intelligent, educated man who, prior to his conversion, was as intellectually curious an individual you could hope to meet.
But perhaps the most disturbing of all his new dogmas was his new view of democracy.
He was now, he explained, against a state body that arrogates for itself the right to decide what is permissible and what is not permissible, "because that is the right of God alone". He further maintained that knowledgeable Muslims of all allegiances should know that an Islamic state should be run on Islamic principles, not democratic ones.

I find this the most disturbing because, let's face it, if my mate or 2 billion other individuals want to believe in fairy tales then that's sad and a waste of intellectual capacity on a truly planetary scale, but ultimately it's not going to affect the rest of us in the short term. But if an intelligent and level-headed individual can suddenly reject the basic principles upon which all free societies are based because his religion tells him to, is it irrational to fear that this disparaging view of democracy is held by the majority of Muslims?
Is it irrational to fear that the Islamic desire for a society governed by their God is a threat to those of us who don't share their beliefs and who cherish the right to determine our own future?
Or put another way, as Hizb ut-Tahrir have it in their manifesto:  is an ideology which maintains
 the rule of people, for the people, by the people -the basis of the democratic system is to be rejected because it is laid down by man and it is not from the God.
one with which we ought to feel entirely comfortable?

I'm just asking...

Because those Muslims who live in democracies and who espouse such anti-democratic beliefs are presumably looking forward to the day when they can (using the democratic process) bring about an Islamic state.

And of course, we shouldn't forget that once an Islamic state has been established, no-one will be allowed to work to bring back democracy - for Allah is a jealous god and has told us that those who work to undermine the caliphate must be crucified (or have alternate hands and feet amputated) (5:33)