I'm coming to this from the opposite perspective: I'm the atheist in my family, my DH is a muslim (albeit not exactly practising - but he remains convinced of the basic tenets of Islam, the authenticity of the quran, authority of the ahadith etc.). We are currently TTC our first. I'm hoping my thoughts on the issue may help.
From my perspective, I have absolutely no objections to us as a family celebrating eid - my family celebrate christmas and I intend to continue doing so in spite of religious connotations. I also don't have issues with DH teaching our children some stories from the quran and generally exploring and discussing his beliefs with them. Again, I intend to do the same thing with my beliefs. My basic approach is of the "some people believe" variety with the added reminder that "you are always allowed to ask questions and make up your own mind".
I suppose from a religion vs culture perspective, you could probably argue that what is mentioned in the quran and the teachings of those ahadith viewed as authentic would qualify as the "religious" bits according to mainstream orthodoxy.
In the context of my own atheist/muslim parent family-to-be, I have a few reservations about some of that. In particular, I have serious issues with the issue of hell and the fate of non-believers in the quran. I absolutely do not want my to be children taught as truth that mum, grandma and granddad are going to have to spend eternity being tortured. I'm also not a big fan of many of the ahadith (and for the record: I've read good chunks of both Bukhari and Muslim).
DH knows this, of course (and in some amazing feat of cognitive dissonance refuses to believe the hell bit) and I trust him to treat these kinds of issues with the necessary sensitivity. On the other hand, I would not be happy at all for some religious teacher whose attitudes I don't fully know to teach my children about Islam in a madrassah setting.
As far as circumcision is concerned: Sorry, but I think it's wrong to cut off a child's forsekin on the basis of what you believe (and your child may or may not believe later in life)! Or, religiously speaking: AFAIK it's based entirely on hadiths and not actually viewed as compulsory by all schools of islamic jurispudence (i.e. a matter of interpretation); some people also argue that the quran's prohibition of body modification should cover this as well.
I suppose the ultimate question is: what (if you have any preferences at all) do you want your children to believe? And of course: what does your DP think?
FWIW, if my children end up believing in Islam because they have considered the matter carefully and decided it's the most rational position on the basis of the available evidence, I'll be happy for them to disagree with me. Just as I'd be unhappy for them to turn into atheists for no good reason (i.e. because it's what I think is right).