Evolutionary Theory : EVOLVES

This so called "flaw" is not really a flaw. It is not believed by the current scientific community that mutations are supposed to be beneficial. I just turns out that some of them are. Also, it's quite evident that humans may not have had a beneficial one yet, as there is nothing evolved to a further extent. Birth defects are sufficient proof of mutation as one of the factors by which evolution occurs. There are other means by which it happens. Evolution is not geared towards making a species the "ultimate species" or even better for that matter. It is rather that mutations either make a species more (or less!) fit for the current environment. As the environment and other factors change, so does the species. Species only evolve to the extent of being called new species once they are no longer able to produce viable offspring with the species from which they came. In other words, only if the mutation were to produce something that would hinder the species from producing offspring with the species from which it came would it be considered a new species. This does not mean, however, that it would survive longer OR even produce offspring. Also, the fact that interspecies transfer of genomes occurs is not a huge new mystery. This happens with plants all the time. It's how we create hybrid plants. The only "new" discovery in 2007 was the frequency with which this occurs. This also doesn't disprove mutations in any way. In fact, it may be more evidence for them. In fact, when gene transfer happens between species, it is still technically a mutation. We do it with bacteria all the time. It occurs via transduction and transformation. Spontaneous mutations have also been "witnessed" and are not a flaw in the theory.

Lateral gene transfer isn't a particularly new theory.

Well yes, the evolutionary theory would change... after all, evolution is change. On the other hand, Creation is unchanging and much more than a mere theory.