Hi.. Don't know if this is getting to you too late..
I lived in Cairo, Egypt for 2 years and we loved diving in Sharm El Sheikh. Its the dive hot spot of Egypt. It offers really diverse diving, from drift dives around deep drop offs to easy paddling around shallow coral patches.
I've also dived the South Pacific, Australia, and Malaysia.. and the Red Sea is still my favourite.
The unfortunate thing about Sharm is that it is usually packed with divers and you need to choose a good dive shop as some places pack divers in like sardines. We used a shop called "Only Six" for our day boats and liked them A LOT.. They used to operate out of the Ritz Carlton hotel in Sharm, but now they've moved to another hotel.. (website is only-six.com if you want to check them out) The dive shops in Sharm will take you no matter what hotel you stay at (they'll pick you up where ever you are staying). I've heard that Sinai Divers, Emperor Dive and Camel Dive are pretty good shops (but I've never dived with them).
Some of the house reef sites around the hotels are battered (especially in the Naama Bay area where a lot of the cheaper hotels are), but you get away from a lot of the really beat up spots on the day boats. You can also do liveaboards out of Sharm too -- which take you to locations out of the reach of the day boats.
Other places in Egypt are Hurghada (the diving isn't as good as in Sharm in my opinion), Dahab (never been there but I've heard it isn't as good as Sharm either) and Marsa Alam. Marsa Alam is further south on the Red Sea and can be a bit difficult to get to (you often have to fly to Hurghada and then take a 3 hour shuttle).
One of the benefits of Marsa Alam is that there are fewer divers there as its a relatively new spot -- but FYI -- its still quite isolated and underdeveloped except for a few hotels. Not much to do outside of the hotel (almost nothing really). That said.. the reefs are in good condition because its a newish spot.
Sharm on the other hand has plenty of restaurants, a range of hotel options, several night spots, shopping etc -- so you can go out and mull around in the evening.
I've got a few short trip reports on Red Sea diving posted a
Big Blue Planet - Holiday diving information for SCUBA divers to use. Look under "southernseas" (I think I'm about 10 on the list).
If you have any questions, let me know and I'd be happy to help you out.
Best,
SouthernSeas