This New Yorker article is a must-read on this story.

Besides relating the actual extent of the abuse, it also does a good job of noting that this wasn't an isolated incident perpetrated by a few bad apples. In a 53-page report by Major General Antonio M. Taguba, refuting an earlier report that downplayed the extent of the problems:

“Contrary to the findings of MG Ryder’s report, I find that personnel assigned to the 372nd MP Company, 800th MP Brigade were directed to change facility procedures to ‘set the conditions’ for MI interrogations.” Army intelligence officers, C.I.A. agents, and private contractors “actively requested that MP guards set physical and mental conditions for favorable interrogation of witnesses.”

This article strongly suggests that, although the MPs' actions were reprehensible, it was most likely military intelligence who instigated and encouraged the abuse.

I think this story is only really getting started. It sounds like it's going to get even worse.