Conluding my brief series introducing the history of modern Egypt
Sadat was succeeded by his vice president, Hosni Mubarak. He has been in power ever since. He largely continued Sadat's policies – maintaining the peace treaty with Israel, the economic liberalisation, and the pro-US orientation of Egyptian foreign policy. More recently, Egypt has been assisting Israel in maintaining the siege of Gaza, merely the latest manifestation of Mubarak's traditional foreign policy.
Mubarak's economic policies (largely continued from the Sadat era) continued to show no obvious benefit to the Egyptian masses. Instead a shifty business elite, often comprising people with close links to Mubarak and his political cronies, seemed to become ever richer.
Politics remained essentially authoritarian, based around Mubarak and his National Democratic Party, with only the merest democratic trimmings around the edges. The Muslim Brotherhood (still technically illegal, but semi-tolerated) continued to be the most prominent opposition grouping. By this stage this group had largely embraced the political process over violence. The regime was too entrenched for it to directly challenge, so the Brothers concentrated on setting up charitable foundations and creating a parallel network to Mubarak's state.
However, the Muslim Brotherhood was not the only Islamist game in town. Seeing the Brotherhood as having gone soft, some were attracted to more hard core groups who carried out a series of unpleasant terrorist attacks on tourists (e.g. the Luxor massacre), regime figures, and Egypt's indigenous Christian community.
On the eve of the current round of protests, the elderly and not particularly healthy Mubarak seemed nevertheless to be secure in power. Few people liked him very much, but he seemed to have ridden out any challenges to his regime and was grooming his idiot son Gamal to succeed him. The Muslim Brotherhood appeared like a spent force, having failed to bring an end to Mubarak and suffering increased state harassment of their charitable and political activities. The headbanger Islamists had largely been crushed or had drifted off to fight the Americans in Iraq or Afghanistan. The secular opposition to Mubarak, while substantial in numbers, was leaderless, disorganised, and ineffective. The Grim Reaper looked like the only serious threat to Mubarak's continued rule.