Natural genetic engineering: intelligence & design in evolution?

There are many things that I like about James Shapiro's new book "Evolution: A View from the 21st Century" (FT Press Science, 2011). He begins the book by saying that it is the creation of novelty, and not selection, that is important in the history of life. In the presence of heritable traits that vary, selection results in the evolution of a population towards an optimal composition of those traits. But selection can only act on changes - and where does this variation come from? Historically, the creation of novelty has been assumed to be the result of random chance or accident. And yet, organisms seem 'designed'. When one examines the data from sequenced genomes, the changes appear NOT to be random or accidental, but one observes that whole chunks of the genome come and go. These 'chunks' often contain functional units, encoding sets of genes that together can perform some specific function. Shapiro argues that what we see in genomes is 'Natural Genetic Engineering', or designed evolution: "Thinking about genomes from an informatics perspective, it is apparent that systems engineering is a better metaphor for the evolutionary process than the conventional view of evolution as a select-biased random walk through limitless space of possible DNA configurations" (page 6). In this review, I will have a look at four topics: 1.) why I think genomics is not the whole story; 2.) my own perspective of E. coli genomics, and how I think it relates to this book; 3.) a brief discussion on "Intelligence, Design, and Evolution"; and finally, 4.) a section "in defense of the central dogma".