This concept really isn't all that new.
You've probably heard of it before: Ligers (tiger + lion), Mule (horse + donkey), Geep (Sheep + Goat) though that happens in real life, not a lab. We've been manipulating embryos for a long time now, not just our own. Throw in humans in the mix and it's a different situation though.
I'm sure some of you have heard of xenotransplantation. Where the organ from a pig or whatever is implanted into a human and can be used instead of an organ from a donor... it's along those lines. We're at the point that we're trying to genetically engineer the pig so that it's more compatible with humans so that when the whatever is transplanted there's less risk of rejection, complications, yadda yadda yadda. Same thing mess with human cells and pig cells to make the pig cells more compatible with human cells, etc.
Though it's right around this area that things get fuzzy since you're manipulating things at the cellular level. From what I've heard this is another possible way to get stem cells. Fuse human skin cells with the egg of some animal and let it develop so it starts producing human stem cells. <a target=_blank class=ftalternatingbarlinklarge href="http://www.usatoday.com/tech/news/techinnovations/2003-09-22-chinese-stem-cell_x.htm">http://www.usatoday.com/tech/n...hinese-stem-cell_x.htm</a>