Its one my biggies with Christianity too. The whole idea that faith can be so important to God that he'll torture you for eternity simply for not believing in him. THe idea that faith is as important or more important than good deeds just turns me right off. I wasn't aware that this also existed in Islam. I am fairly certain it doesn't exist in Judaism.
You misunderstand faith, at least the Christian definition of faith. Faith is not belief
ABOUT something or someone. Faith is belief
IN. That may seem like much of a difference at first look but it is huge. It is difference between gathering a bunch of information and saying I believe this and I don't believe that. (In other words, the way discussions usually go on a forum like this.) And actually entering into a living relationship with someone, something outside of one's self.
Not the best example, but a vivid one, so let me illustrate with the picture of being caught in a burning building. (I say not the best example, because I don't want to get this discussion sidetracked to talking about views of hell. It could easily be done, but that is not my point here.) So, one gets caught in a burning house, trapped on the second floor, and there is no escape out the stairs. But you have access to several windows and below each of them are people telling you to jump, they'll catch you. Do you jump? And if so, from which window, to which person? The answer to that question is entirely dependant on who you have faith in to actually catch you. As such, faith is not about knowledge (you don't actually have any way of knowing who will and who will not succeed until after you have jumped.) Faith is about trusting.
Faith, as Christians use the term, is about living in this trust relationship with God. So, it isn't about God torturing people who don't believe in him. It is about who are not living in a relationship with him, have simply removed themselves from the blessings that he can extend to one in life. Among them the life that is within him.
I think that you have rightly spoken when you said that you believe you will cease to exist at the end of your worldly life. My understanding is that the only thing that is truly eternal (that is outside of the limitations of time and space) is God. Everything else is a part of creation and bound by that which we observe regarding it, and so in the end we all die and would be no more...save if we were to belong to God. Now, I can't tell you the exact nature and means by which God would preserve us, but he will only do that with those who are connected to him.
Of course God could have created a world in which he might choose to preserve everyone and everything, but as you observe that is not the world we live in. Why? I don't know, except that I think it is not in the character of God to force people to be in a relationship with him who do not desire it. So, you have your choice -- find your life in God, or don't. And given that we are not eternal beings, to find an eternity apart from God is not possible. But if you don't find life in God, then you will suffer the opposite of life, which is death.
So, it isn't about what we know, or what we do, it isn't even really about what we believe (at least not as you have used the term above). It is all about being connected to God, living in a trust relationship with God, and finding life because of that connection. An the one word label for living in that trusting relationship with God -- Faith.