I believe that he should continue to serve his term until the elections in September. I fear that another person will take up command if he goes any sooner. Egypt is surrounded by some rather hostile nations. Also, the US has quite a bit invested in Egypt, I would hate to see all of that go to waste and for us to lose them as a ally. The protests were brought on by economic turmoil (~20% below the poverty line in 05') and several other factors, Mubarak has been heading the country for ~30 years and I am quite sure he can handle a few more months.
I am worried that further violence will escalate in the region between Mubarak supporters and the remaining, more extreme, protests. I recently read something about teargas being used in the crowds... doesn't seem good.