What really is striking is the fact that Mubarak gave up his authority to the "military council," suggesting that a palace coup might be going on. The Egyptian army most likely considered that the only thing that united the protesters at Tahrir Square was their intense dislike toward Mubarak and his regime and thus they decided to nudge Mubarak out.
Whether this will lead to true democracy remains to be seen, as the opposition will most likely split after losing their common enemy and will no longer be as intense in their pressure as when Mubarak was in power. This in turn will give the army a breathing space to consider their next steps.
For the time being, what I suspect we will see is massive populist acts in order to bolster the military regime's popularity among people, from canceling the emergency law to arresting many dead weights, such as Mubarak's unpopular cronies.
It will be interesting to observe in the next several weeks what the military will do, and this will heavily be influenced by the factions within the military itself, the other powers in the region (notably the Saudis), and the United States (regardless of its lack of focus in the past few weeks).
Should the protesters split between those who advocate for slow and ordered transition to democracy and those who want a quick leap across the chasm, the military will find itself at another crossroad, and here the split between the hardliners and the pragmatists within the military will be important. Basically as an institution, the Egyptian military, and in fact every military institution in the Middle East, has intense dislike toward political Islam, which probably dates from the modernization of the military during the Ottoman Empire, where the idea of professional army was spread from Europe. What important is whether the military's dislike toward the Muslim Brotherhood interferes with their commitment to democratization.
Should the hardliners, those who see the prospect of the Muslim Brotherhood's rise of power as a huge threat to the state, manage to prevail, they may decide to impose a crackdown, especially if the Saudis manage to influence the decision-making within the military. The unfolding events from the past few days made it clear that the Saudis' pressure to both the White House and Cairo was important to help maintaining Mubarak's tenuous grip to power. The Saudis might, in essence, minimize any risks of financial boycotts from both the United States and the European Union should the military decide to crack down. Besides, it is not in the Saudis' interests to find the Muslim Brotherhood, an organization that it did not approve, ruling the strongest state in the region.
Still, if the European Union be grows a spine and the Obama Administration finds its missing backbone, the pressure may be so intense that the Egyptian army may choose to pursue the Turkish path, where the military will consider itself as the guardian of revolution while closely watching the popular mood.