I am currently reading into this and see strong arguments on both sides of the debate.

For those of you living here, do you think Malaysia displays more of the qualities of a nonsecular/religious state? Or is it more or less a secular state on most issues, with some preferential treatment for the Islamic religion?

depends if you are into religion or not. Being agnostic I could care less, it never bothers me how people choose to pray or what beliefs they hold. I never had beliefs imposed on me anywhere in Malaya.

Their constitution is pretty clear as Federal law leads on this issue, you may wish to research.

Living in Penang, which has a mix of Buddhist, Muslim, Hindu, Christian and a whole lot more besides - I can't see it as an issue.

If I lived in Kedah, then maybe my views would be different, but I don't live there.

Things may change elsewhere and other places may move from Secular / Multicultural to more Islamic, but that couldn't easily happen in Penang without a change of population, either a massive influx of ethnic Malay or a massive exodus of Chinese and Indians.

I doubt that is going to happen during my lifetime.

As KolF says, how it "feels" differs from state to state. In Penang, it is racially majority Chinese and I guess has a similar "feel" to Singapore, with some rough edges. Penang is not Singapore, but those who are familiar with Singapore will see and feel some familiarities.

The reality of the whole country is somewhat confusing, like so many things. Wikipedia says:

Despite the recognition of Islam as the state religion in the constitution, when created it was explicitly noted that the status was merely a symbolic one. It was not seen as something to be used as a basis of law, except by some Malay nationalists. Currently a dispute exists between those who promote a secular interpretation of the federal constitution and those who believe Shariah courts and Islamic law should have supremacy. The movement towards a more Islamic society, known as dakwah, is often viewed as an effort to resist western influences. Secular values are often favoured by the Malay elite, who welcome the shared goals of industrial development. It is however opposed by Muslims who see it as an invasion of western culture and worldview. Support for a more Islamic society often comes from the more rural population of Malays
http://en.wikipedia.org/wiki/Religion_in_Malaysia

According to the government and Prime minister Malaysia is not a secular country, just the other week they launched the Shariah Index:
Prime minister Datuk Seri Najib Razak yesterday launched the Malaysian Shariah Index, a product that complements Islamic governance through a more comprehensive shariah requirement yardstick.

- See more at: Malaysia launches first ever shariah index – Bernama - The Malaysian Insider

Prime Minister Najib sees liberal values, secularism and human rights as threat to Islam:
Muslims threatened by liberalism, secularism and LGBT, says Najib Prime Minister Datuk Seri Najib Razak said Islam and its followers are now being tested by new threats under the guise of humanism, secularism, liberalism and human rights.

- See more at: Muslims threatened by liberalism, secularism and LGBT, says Najib – Bernama - The Malaysian Insider

This is exactly what has been happening in the last years, not only in Penang but also in Sabah and Sarawak (predominantly Christian). The government is actively trying to change demographics in these three states.