Of course Arafat fomented terrorism. It's what the underdogs do. Menachim Begin was a terrorist with blood on his hands, and so was just about every other bugger who tried to get independence/recognition for his own people's point of view - with the exception of Ghandi. Most people - Arafat included - sooner or later recognise that the gun is not the best way to win hearts and minds, and adopt a more political approach.
Sadly for Arafat and the Palestinians, Arafat wasn't a natural politician and was inclined to throw his toys out of the pram when he couldn't get what he wanted from the Israelis.
Latterly Sharon has been a much more evil bastard than Arafat, in my opinion; deliberatey and cynically trying to avoid giving worthwhile concessions to the Palestinians and endorsing murder and terror.
Before wringing your hands over Munich in '72 (for which Arafat may or may not have had some responsibility), consider the foul Chabra and Shatilla massacres, for which Sharon was directly responsible.
Arafat's death may have cleared the log-jam in the Palestinian political process, but the poor sods will get nowhere while Sharon remains in power. Shame we're not listening to Kaddish over him.