It's inhuman and unwise to target civilians when they are mere puppets of agents higher up in the hierarchy. It's simple, really: the US is killing Pakistanis, and when they find that their people are being culled, the likes of Faisal Shahzad will snap and go to any length to get back at the US.
IMO, what we really need is a MASSIVE propaganda effort to isolate Islamist ideologues within Pakistan. Not sure how this will happen, but the parallel I have in mind is the downfall of Nazism in Germany. If NATO along sympathetic states like India pool their resources together, I think it should be possible to buy out/instigate/support any number of revolutionaries within Pakistan who will effectively portray the Islamists as the cancer of not just Pakistan, but of mankind itself.