No, Mr. Bush, Musharraf is not and has never been an ally of the United States. He is a dictator. He is not a freely elected democratic leader. He has suspended Pakistan's own constitution. He has thrown out the judiciary (a judiciary that was at the moment considering the legality of his having most recently stood for election as President, while holding office that he obtained through a coup!). He sent one opposition leader, Nawaz Sharif, back into exile, despite the ruling by Pakistan's Supreme Court that he had an inalienable right to return.
Apparently, over the past several months, the U.S. government had worked to broker a power sharing deal between Musharraf and another opposition leader, Benazir Bhutto, who was allowed to return (though suspiciously street lights were out just before a suicide bomber nearly succeeded in her assassination). Was it a setup? Was it hoped she would be killed, as a pretense for a state of emergency that has been declared in any case? Was she foolish in thinking it proper to share power with such a man? Probably. Now at least she has put aside that foolishness.
No, President (how it pains me to use that title for you) Bush, Musharraf is not an ally and friend. He is a pathetic (and dangerous) opportunist. Do not forget that it was under his government that A.Q. Khan sold nuclear secrets to North Korea, Libya, and Iran. It was Musharraf personally who pardoned him the very next day! This is no friend and ally. Have we learned nothing from the past failures of American foreign policy?
To be clear: the United States should never treat the likes of Musharraf as friends. If necessary, we may treat them (with cautious suspicion) as strategic interests.