Not by the point of the crusades, however. (Unless I'm mistaken.)
Oh yes, it was. "From that time to the present a false prophet named Muhammad has appeared appeared in their midst. This man, after having chanced upon the Old and New Testaments and likewise, it seems, conversed with an Arian monk, devised his own heresy" -John of Damascus 746.
There are other examples of this up till the 1400s if you have the patience to read them. But most definately Islam was considered a heresy of Iconoclasm and Arianism mixed from what most European scholars of time thought.
It was both. It was clever tactics by the Venetians, but the fact the Catholics were willing to destroy the greatest city in Christendom that they went out there to theoretically defend shows the degree of tension.