as salaamu alaykum,
The problem is you are comparing apples and oranges when you say Islam vs. the West. Islam is a religion, the West is a cultural/geographical area. The opposite of West is East, not Islam
I understand your point though, I think what you mean is, is Islam compatible with the ideas/culture of the West?
There are definitely ideas or practices of the west that stand in contradiction to the religion of Islam, but that doesn't mean that one is a necessary enemy of the other. There are many areas, principles, and values which are shared between the two. Historically we've seen Muslim communities thriving in a spectrum of different cultures and societies, and some of the largest Muslim communities today are minorities in majority non-Muslim lands (think India and China) or live in peaceful coexistence with other non-Muslim citizens (think Malaysia, Indonesia, etc). The Shari'ah (Islamic legal tradition) has some areas in which compromise cannot be made (such as foundational principles of law, beliefs, or in the obligatory practices of a Muslim such as the daily prayer) while there are other areas in which there is room for flexibility in accordance with the norms of the society in which it is being practiced.
I've recently been listening to an excellent CD set called "Sacred Law in Secular Lands", a lecture series by Shaykh Abdullah Bin Bayyah with live translation by Sh. Hamza Yusuf of the Zaytuna Institute in California. He goes into quite a bit of detail about how Muslims can live by and practice their religion, while at the same time dealing with the realities of their lives in the west. One of his main points was that we need to have scholars who are educated in the religious tradition, but are also cognizant and informed about the culture, history, etc of the west... to help us understand how we should apply and practice our religion in the western context.
Dr. Tariq Ramadan may also be of interest to you, he has a book entitled 'To be a European Muslim' which discusses these issues as well.