What is the significance of the birth of the Prophet Muhammad, and when and how is it celebrated?

Muhammad, peace and blessings be upon him, is the Messenger of Allah to all mankind. Through him, Allah saved humanity from misguidance and led them to guidance. Acts of worship in Islam are based on the principle that it is not permissible to worship Allah except in the way legislated by Allah and His Messenger; for he, peace and blessings be upon him, said: "Whoever innovates into this matter of ours something that does not belong to it, it is rejected." This includes feasts (Eids), as Allah has legislated only two Eids for us. The celebration of the Prophet's birthday was not legislated by the Prophet, peace and blessings be upon him, nor was it practiced by the Companions, who were the most loving of people towards him. Therefore, celebrating it is an innovation (bid'ah), for he, peace and blessings be upon him, said: "Indeed, every innovation is a misguidance, and every misguidance is in the Fire." And for whoever wishes to glorify the day on which he was born, the legitimate alternative is fasting on Mondays; for he, peace and blessings be upon him, said: "On it I was born, and on it revelation descended upon me."