"And this [is] the blessing, wherewith Moses the man of God blessed the children of Israel before his death. And he said, The LORD came from Sinai, and rose up from Seir unto them; he shined forth from mount Paran, and he came with ten thousands of saints: from his right hand [went] a fiery law for them." (Deuteronomy 33:1-2)
Notice the words "came", "rose up", "shined forth", "he came", "from his right hand went" ... they all indicate a past tense (not a future tense). At the time this blessing was spoken by Moses, the event refered to had already happened. Muhammad is not the subject.
Under a beautiful metaphor, borrowed from the dawn and progressive splendor of the sun, the Majesty of God is sublimely described as a divine light which appeared in Sinai and scattered its beams on all the adjoining region in directing Israel's march to Canaan. 
These four places, Sinai, Seir, Paran, and Meribah-Kadesh, mentioned by Moses in the text, are the identical places where God manifested His glory in a fiery appearance, the more illustriously to proclaim His special providence over and care of Israel. 
"... he shined forth from mount Paran ..."
"He" refers to the same "he" at the beginning of verse 2, i.e. "He" = "The LORD (God)", not Muhammad.
"... and he came with ten thousands of saints ..."
There is a similar reference made to Jesus by Jude in verse 14 - "behold, the Lord cometh with ten thousands of his saints".
(a) the "saints" belong to the "he" of this verse, which represents "The Lord". (b) the term "saints" was never used in the Quran to describe the followers of Muhammad. The fact that "saints" and "soldiers" both begin with "s" in English is not enough to establish such an identity.
Regardless, this event has already occured thousands of years before Muhammad. Since it is definitively in the past (see my notes at the beginning) it is therefore blatantly silly to make the claim that "Prophet Muhammad (pbuh) is the only prophet of God who has ever fulfilled this prophesy". It never was a prophecy to be fulfilled by anyone.
But it is even worse to claim that "We also read in verse 33:2 that a fiery law shall issue forth from the right hand of the prophet from Paran." (bold face is my emphasis). Nowhere have I ever seen more corruption and changing of the holy scriptures than in Muslim "quotations" of the Bible. The passage has no mention of "a prophet from Paran", it is not even said that the law came from Paran, but that God came from Paran, and the law from his right hand. "Shall issue forth" is not in the text either nor any other future tense construction.
If you still want to ignore proper grammar, then also think about this: Muhammad with his army did not come from Mecca (Paran) but to conquer Mecca. His attack was launched from another location. Besides, this verse says nothing of the conquering of a city.
"... from his right hand went a fiery law for them"
The law represents the Law that God gave to the Jews at Mt. Sinai. The law is considered "fiery" because (a) it was given "out of the midst of fire" (Deuteronomy 4:33) and (b) it works like fire; if it be received, it is melting, warming, purifying, and burns up the dross of corruption. If it is rejected, it hardens, sears, torments, and destroys. 
Finally, this text is said to be "the blessing with which Moses the man of God blessed the children of Israel before his death" (v. 1). If it were a prediction about Islam, which has been a constant enemy of Israel, it could scarcely have been a blessing to Israel. In fact, the chapter goes on to pronounce a blessing on each of the tribes of Israel by God, who "will thrust out the enemy" (v. 27). There is indeed prophecy in this chapter. The prophetic blessing of the tribes starts with verse 6. However, before announcing the future blessing in verses 6-29, verses 2-5 are first looking back on the past blessings of God and praise him for those.
Notes and further remarks:
,  The Bethany Parallel Bible Commentary of the Old Testament ... copyright 1967.
 The subject "he" refers to "The LORD" in the first half of the verse, which in Hebrew is YHWH, the holy and special name of God. It is absolutely amazing how Muslim accuse Christians of shirk, but then have no hesitation to apply statements about God to Muhammad, essentially equating Muhammad with God. This is not the first time Al-Kadhi has done this. See our exegetical response to section 6.4.
Furthermore, we have a careful geographical discussion regarding the identity of Paran whose identification with Mecca interestingly is a really old Muslim polemic even though Yaqut was not as audacious as Al-Kadhi to include the blasphemous claim that it was Muhammad who came from Paran when the text clearly says it was The LORD (God).
The second excercise in Muslim geography from this section is the claim that Seir is a reference to Jesus. Although this is geographic nonsense, theologically he might be closer to the truth than he anticipated with his statement.
The Rebuttal to "What Did Jesus Really Say?"
Answering Islam Home Page