I agree with Osiiic, Cherryfunk, et al. The best choices are (in no order):
1. Abbasids
2. Bulgaria
3. Georgia
And I'd consider Armenia a close fourth, though as far as I can tell, only three more factions can be worked in.
1.Abbasids: most of us agree they'd be the best new islamic faction, and historically the most appropriate one. They'd give the Kwarezmians more to think about and help fill up more of the new space on that side of the map.
2.Bulgaria: most here agree that the balkans need something more, so it's a tough choice between serbia and bulgaria, but in the end I think Bulgaria would be slightly more significant, as they were a very big factor to the Byzantines. They'd be a buffer between the Byzies and the Hungarians, as well as giving the Byzies a lot more to think about.
3:Georgia: As has already been said, Georgia would be a fascinating and potentially very fun faction, being sandwiched right there among all those hostile muslims! Also, they'd be important to re-balance the Christian/Muslim balance if Abbasids were added in addition to Kwarezmians. And who wouldn't like another orthodox faction? Perhaps give them a couple Armenian units as their paths crossed a bit over the centuries.
As for the factions to sacrifice, the three most obvious choices seem to be:
1. Ireland
2. Merge knights templar units into Kingdom of Jerusalem
3. Portugal. (I know that's controversial, but with Aragon in there, there's enough going on in spain, and Aragon is more historically signifcant for this period anyway, creative assembly should have known this from the get-go.)
. cheers. 
