How's the war on terror going? That's a difficult question to answer, because there is wide disagreement on exactly what the war is. For example, there are many Islamic terrorist groups active, many of them were in action long before September 11, 2001. This includes the violence between Sunni Arabs, and everyone else, in Iraq, and the war between the Taliban, and various opponents inside Afghanistan. Outside of those two areas, where al Qaeda declares itself a participant, there has not been a lot of al Qaeda activity. In 2005, al Qaeda attempted nine attacks, and succeeded in seven of them. But last year, al Qaeda attempted seven attacks, but only one succeeded.
Islamic terrorism has always been around, just look at the history of areas where Moslems and non-Moslems live close together. This terrorism began to intensify in the 1980s. The 1980s war in Afghanistan is often described as the birthplace of al Qaeda and the current round of Islamic terrorism, but that's not the case. The violence began in the 1970s, and that outbreak culminated in a 1979 attack, by Islamic radicals, on the Islamic holy of holies in Mecca. At about the same time, the leadership of Pakistan (a military dictatorship at the time) decided to back Islamic radicalism. In that same year, Islamic radicals took over in Iran. It was al Qaeda, an organization formed by failed Islamic radicals, forced to flee Saudi Arabia (Osama bin Laden), Egypt (most of the other senior leaders) and other Arab nations. It was al Qaeda that decided to attack the West. Before that, Islamic radicals were trying to take control of the nations they lived in. That, however, proved difficult. It only worked in Iran and Afghanistan. Al Qaeda blamed the difficulty in overthrowing Moslem government on the West. This resulted in bringing the West into the war, against the Islamic radicals. Not a wise move, as the violence against Moslems in Iraq has caused al Qaedas popularity to plummet across the Moslem world. Attacks on the West also led to the overthrow of the Islamic government (the Taliban) in Afghanistan.
The American invasion of Iraq in 2003 would appear to have been a plus for al Qaeda, as Saddam Hussein, and his Baath Party, had long been an enemy of Islamic radicalism. But Saddam got religion after his defeat in the 1991 Gulf War. During the 1990s, Saddam became a major supporter of Islam, building many mosques and proclaiming himself a major defender of the faith. Al Qaeda was wary of this, but did enter into negotiations with Saddam. After all, Saddam and al Qaeda shared a hatred for the West, and especially the United States. A major fear was that Saddam would provide a refuge for al Qaeda, and supply them with chemical or nuclear weapons (if not a bomb, then radioactive material.) The fighting in Iraq is basically between the Sunni Arab minority, assisted by al Qaeda, against the majority Kurds and Shia Arabs. While much is made about Iraq becoming a "school for terrorists," few of the "graduates" have shown up anywhere else, pulling off successful attacks. On the other hand, many known Islamic terrorists have gone to Iraq, and gotten themselves killed or captured. So Iraq has to be seen as a net loss for al Qaeda.
Same story in Afghanistan. Most of the recent al Qaeda activity in Afghanistan is from bases in Pakistan. For nearly three decades, Pakistan has been a base for Islamic radicals and terrorists. Pakistan joined the U.S. as an ally in the war on terror largely to get some help in clearing out its own Islamic terrorists. Most senior officials in the Pakistani government regret their earlier support for Islamic radicalism, but getting rid of the problem is proving difficult. There's a similar situation in Saudi Arabia. That sort of thing can be considered an "internal problem." That said, the al Qaeda "war on the West" is not going well at all.