Quote from bungrider:
Also consider that Saddam is a totally insane egomaniac, like stalin -- this is a guy who has killed members of his own family because he was afraid of them becoming too popular.
Why would Saddam allow the very popular al-queda into his domain??
Here and in your initial post you make certain assumptions about the popularity of SH and AQ that I don't believe the hard evidence justifies, and, even in the sub-cultural groups in which UBL in particular is almost like a pop idol, it's not clear how deep the support really is. As for SH, reports from the Arab world are that he himself is widely loathed, and that very few people would regret to see him brought down. Their feelings about the US are a separate matter, but, as with all human feelings, remain subject to change.
The reasons for SH supporting and/or trying to use various terrorist groups are numerous, and many have already been discussed here. Many states in the world, including, much to our shame, the United States, have tried to make use of terrorist groups, often leading to what intelligence fans call "blowback" (taken from the expression for the mess you get on yourself when you shoot someone at close quarters): Some observers and analysts claim that one reason the US has not done more to expose SH's links to terrorists is that some of the evidence either directly exposes US and allied (esp. Saudi) complicity with the same groups, or risks opening up the subject in such a way that it could lead to exposure.
If you like reading about such matters, check out DEBKAfiles. I'm not saying I trust everything they say: They tend to be sensationalistic, and they seem to see the world as a particularly ugly Tom Clancy novel - but they do bring up interesting possibilities, do manage to anticipate the major news outlets on the Middle East and terrorism issues, and do offer items that are often worth investigating further.
http://www.debka.com/
This article from ASIA NEWS also has some interesting info, more o the subject in general and on certain Asian terror groups - and directly confronts US past complicity:
http://www.atimes.com/atimes/South_Asia/EB04Df04.html