We study the two-dimensional Muskat problem in a horizontally periodic setting and for fluids with arbitrary densities and viscosities. We show that in the presence of surface tension effects the Muskat problem is a quasilinear parabolic problem which is well-posed in the Sobolev space H-r(S) for each r is an element of(2,3). When neglecting surface tension effects, the Muskat problem is a fully nonlinear evolution equation and of parabolic type in the regime where the Rayleigh-Taylor condition is satisfied. We then establish the well-posedness of the Muskat problem in the open subset of H-2(S) defined by the Rayleigh-Taylor condition. Besides, we identify all equilibrium solutions and study the stability properties of trivial and of small finger-shaped equilibria. Also other qualitative properties of solutions such as parabolic smoothing, blow-up behavior, and criteria for global existence are outlined.