From a Muslim perspective we believe that the greatest sin, the one that Alah chooses not to forgive is disbelief. I'm a bit shaky on Christian and Jewish theology but I'm pretty sure that the first commandments are also about the importance of worshiping G-d and not worshipping other Godsor idols. This doesn't mean than we believe that anyone who isn't Muslim will go to hell. On the contrary the Quran specifically makes the point that non-Muslims can attain parradise.
Those who believe and those who are Jews and Christians, and Sabians, whoever believes in God and the Last Day and do righteous good deeds shall have their reward with their Lord, on them shall be no fear, nor shall they grieve
In Islam we also believe that if you have not had the opportunity to hear Allah's message then you won't be punished for your lack of faith.

Ali, the Islamic position is the same as the one you mentioned. If the laws of the land do not contradict Islam then we should obey them but if they did contradict Islam (ie we were fobidden from prayer or forced into murder) then we would have a moral obligation to break that law.

When it comes to forgiveness, as I said above, we believe that Allah may choose to forgive any sin except disbelief. A sheik once told me that the mercy that Allah placed on earth is equal to less than 1% of the mercy of Allah. So all the love of all the mothers ever is nothing compared to the love of Allah.This doesn't mean that we can just take mercy for granted and just do whatever we want it just means that if we ask for it, it's there.