It looks like Hosni Mubarak is about to step down:
President Hosni Mubarak will meet the demands of protesters, military and ruling party officials, the Associated Press reported Thursday, in the strongest indication yet that Egypt's longtime president may be about to give up power....The military's supreme council was meeting Thursday, without Mubarak, its commander in chief.
Egypt’s armed forces on Thursday announced that they had begun to take "necessary measures to protect the nation and support the legitimate demands of the people,” a step that suggested the military intends to take a commanding role in administrating the strife-torn nation.
There was no immediate confirmation that the army intended to replace the government named by President Hosni Mubarak, but protesters gathered in Tahrir Square appeared to welcome reports that the military had replaced the civilian government they have steadfastly opposed.
I'm not dumb enough to make any predictions about how this is going to end, but historically, when a country's military announces that it's taking over in order to "support the legitimate demands of the people," that doesn't bode well for the legitimate demands of the people. It may be good for stability, but count me skeptical that this is going to turn out well for democracy.
UPDATE: Here's a quick tutorial on Egypt's military from Daniel Williams, a Human Rights Watch researcher who was recently arrested by security forces in Cairo:
What's at stake in the current struggle playing out in Tahrir Square and across Egypt is not only Mubarak's fate but also the prerogatives of the Egyptian military within a system it created. Since the 1952 coup that overthrew the monarchy, military men — Gamal Abdel Nasser, Anwar Sadat and Mubarak — have held Egypt's supreme lever of power: the presidency. Until 2005, presidential elections were one-candidate referendums. In 2005, when multiple candidates were permitted, the second-place finisher, Ayman Nour, was hustled into four years' imprisonment on trumped-up fraud charges shortly after the vote. All governorships in Egypt are held by current or former military officers. Omar Suleiman, the new vice president, is a general. Ahmed Shafik, the new prime minister, is a retired air marshal.
In Egypt, the military is not a profession; it's a ruling caste.