Oh, Jman, transitional forms i'd forgotten about that one.
I don't think that's really an issue either, (as far as i'm aware) there is a big hunt in among geologist/whichever scientists are interested to find new fossils which add to the picture, that doesn't mean there are all these missing transitionals, just that it's hard to find fossils at all and so we're always on the lookout for new ones...
When it comes to transition between species, i think the coolest, or most interesting for us to look at, is the similarity in dna between the great apes. (there are 5 of us: orangutans, chimpanzees, orangutans, gorillas, humans and bonobos, all very similar in appearance: http://sheppardsoftware.com/content/animals/images/mammals/Apevsmonkey_greatapes.jpg)
Genetically we are very similar aswell, though humans have 23 chromosone pairs and all the other have 24. (and a chromosome is very important, as the difference between a pair xx and a pair xy causes the difference between male and female... oh and you get one of each chromosome from each parent, so you get an x from your mother, and either an x or y from your father... though i have a cousin who has a triple chromosome xxy - which is incredibly rare, and has mesed up his sexual development - and destroyed his faith in medical science... by the way most chromosome triples or deletions result in the failure of the development of the embryo. i suppose since xx works, and xy works, it's not too surprising that xxy isn't fatal) anyway, when it comes to apes a lot of our genes are the same. It can be shown that in the 23rd chromosome (in humans) we have a lot of genes which in the other apes are split between the 23rd and 24th chromosome pairs.
Ok, so this isn't proof of anything, but it points to a previous ape which had 24 chromosomes and due to a mutation (which aren't that rare, most either do very little or cause the embryo to fail to develop/die) two of the chromosome pairs merge. (keeping most of the genes which had been split onto the two pairs...)
now i don't really know what defines a chromosome, or a gene, heres a picture: http://upload.wikimedia.org/wikipedia/commons/4/4b/Chromatin_Structures.png i think the words chromosome, gene, etc shouldn't be thrown around with such gusto by lay people who don't now the difference, but I think i haven't messed it up soo much.
Anyway the point is not we are descended from Apes, it is we are one of the great apes. (related in the same way dogs, wolves, foxes, and dingoes are all canines or polar bears are related to grizzlies, or cats to lynx, pumas, and lion-tiger hybrids) The point is that whatever we are descended from it had different genes, it must have due to mutations, we can track some genetic material back (in homo sapiens) over a million years (though there is always some corruption in genetic samples, and million year old ones are harder to get) It seems pretty likely that there was once one Ape species, which oer time seperated into the 5 different ones we now see. (and that one Ape species probably had 24 Chromosome pairs, and then a mutation caused our anscestors to merge a Chromosome - this sort of mutation has been seen, so it's a process we understand, and given that we're guessing about what happened in humans) By the way, two species is 'technically' defined as being different if they can't mate and provide fertile offspring. (as horses and donkeys can mate but they produce infertile offspring...) it is a technical definition, but it is also a measure of the genetic drift between indivuals.
If two groups are seperated (by say geography), their mutations will be different, the ones which don't kill the offspring will survive and spread within a group. (this can be done in the lab, or you can imagine how humans if we colonise different planets will not be in contact with each other as often - but given that most great apes live in different areas it is easy to imagine that gibbons and chimps don't come acoss each other that often: http://sheppardsoftware.com/content/animals/images/mammals/Apevsmonkey_distribution.jpg )
Anyway, once you get a mutation which swaps the order of two chromosomes
ABC mutates to ACB (say) then when two animals mate they pass on one of each of their chromosomes to the offsping: giving the child ABC (from the unmutated parent) and ACB (from the mutated one) now the child will pass on randomly on of his A's (the first chromosome) then randomly a C/B, (the second chromosome) and lastly randomly a B/C - giving the second generation A C/B B/C which equals either ACB, ABC, ACC or ABB, now the last two can't produce viable offspring (they don't have all three chromosomes... so they are missing a whole segment of genes)... these kinds of mutations (swapping the order of genes) don't change the individual species that much, but they will seperate them from being able to reproduce (and hence mix their dna) with those who don't have them.(once you have enough swapping mutations, you'll have lots of other little mutations, so the two species will also have some other differences... like horses and zebra)
anyway, beyond the technical definition of being two species now, not being able to mix the genes within their pool means they will continue to diverge (develope their own mutations and some of them will develop some traits which will be an advantage that the other species oes not posses... ipso facto: we developed bigger brains, which allowed more complex communications and the development of culture...)
@Jman: Em, this doesn't really address your concerns about the creation of life, and the improbabilities of such, but i think it deals more with the hows of genetics and how a species could (if we assume enough generations are allowed pass) become unable to mix their genes and eventually gain new traits which they wouldn't share... (emphasis placed on the could, in experiments we've only tested this with simple organisms which have shorter life spans, and therefore pass hrough multiple generations much faster... but in theory it works.)