Malaysia gets a bad rap when it is accused of being a hideout for Islamic terrorists. While the government there uses a lot of Islamic rhetoric, this does not include support for Islamic terrorists. In fact, the Malaysians have been quite good at finding, and arresting those Islamic terrorists who do fall for the idea that Malaysia is a hospitable place for them to set up shop.
Across the border in Thailand, where a Malay Moslem minority has been getting restless, and violent, over the last few years, extensive police investigations revealed that there was no Malaysian connection. While Indonesia has sometimes complained of Malaysian refuges for Indonesian terrorists, the Malaysian police recently arrested a dozen Indonesians who had been planning attacks from inside Malaysia. This action severely damaged an Indonesian terrorist group called Darul Islam, and captured documents made it clear that most of the targets were in neighboring countries. Darul Islam believed they were safe, or at least safer, in Malaysia. The police will only say that they had Darul Islam under surveillance for many months, and that these terrorists had gotten most of their technical information (on bomb making) from the Internet.
Malaysia, despite nationalistic and pro-Islam statements by its politicians, has been cooperative with counter-terrorism efforts in the region. The Malaysians prefer to do this quietly, but the results speak for themselves.