There's been a real advance in the field of engineered "unnatural life", but it hasn't produced one-hundredth the headlines that the arsenic bacteria story did. This work is a lot more solid, although it's hard to summarize in a snappy way.
Everyone knows about the four bases of DNA (A, T, C, G). What this team has done is force bacteria to use a substitute for the T, thymine - 5-chlorouracil, which has a chlorine atom where thymine's methyl group is. From a med-chem perspective, that's a good switch. The two groups are about the same size, but they're different enough that the resulting compounds can have varying properties. And thymine is a good candidate for a swap, since it's not used in RNA, thus limiting the number of systems that have to change to accommodate the new base. (RNA, of course, uses uracil instead, the unsubstituted parent compound of both thymine and the 5-chloro derivative used here).
Over the years, chlorouracil has been studied in DNA for just that reason, and it's been found to make the proper base-pair hydrogen bonds, among other things. So incorporating it into living bacteria looks like an experiment in just the right spot - different enough to be a real challenge, but similar enough to be (probably) doable. People have taken a crack at similar experiments before, with mixed success. In the 1970s, mutant hamster cells were grown in the presence of the bromo analog, and apparently generated DNA which was strongly enriched with that unnatural base. But there were a number of other variables that complicated the experiment, and molecular biology techniques were in their infancy at the time. Then in 1992, a group tried replacing the thymine in E. coli with uracil, with multiple mutations that shut down the T-handling pathways. They got up to about 90% uracil in the DNA, but this stopped the bacteria from growing - they just seemed to be hanging on under those T-deprived conditions, but couldn't do much else. (In general, withholding thymine from bacterial cultures and other cells is a good way to kill them off).
This time, things were done in a more controlled manner. The feat was accomplished by good old evolutionary selection pressure, using an ingenious automated system. An E. coli strain was produced with several mutations in its thymine pathways to allow it to survive under near-thymine-starvation conditions. These bacteria were then grown in a chamber where their population density was being constantly measured (by turbidity). Every ten minutes a nutrient pulse went in: if the population density was above a set limit, the cells were given a fixed amount of chlorouracil solution to use. If the population had falled below a set level, the cells received a dose of thymine-containing solution to keep them alive. A key feature of the device was the use of two culture chambers, with the bacteria being periodically swapped from one to the other (which the first chamber undergoes sterilization with 5M sodium hydroxide!) That's to keep biofilm formation from giving the bacteria an escape route from the selection pressure, which is apparently just what they'll do, given the chance. One "culture machine" was set for a generation time of about two hours, and another for a 4-hour cycle (by cutting in half the nutrient amounts). This cycle selected for mutations that allowed the use of chlorouracil throughout the bacteria's biochemistry.
And that's what happened - the proportion of the chlorouracil solution that went in went up with time. The bacterial population had plenty of dramatic rises and dips, but the trend was clear. After 23 days, the experimenters cranked up the pressure - now the "rescue" solution was a lower concentration of thymine, mixed 1:1 with chlorouracil, and the other solution was a lower concentration of chlorouracil only. The proportion of the latter solution used still kept going up under these conditions as well. Both groups (the 2-hour cycle and the 4-hour cycle ones) were consuming only chlorouracil solution by the time the experiment went past 140 days or so.
Analysis of their DNA showed that it had incorporated about 90% chlorouracil in the place of thymine. The group identified a previously unknown pathway (U54 tRNA methyltransferase) that was bringing thymine back into the pathway, and disrupting this gene knocked the thymine content down to just above detection level (1.5%). Mass spec analysis of the DNA from these strains clearly showed the chlorouracil present in DNA fractions.
The resulting bacteria from each group, it turned out, could still grow on thymine, albeit with a lag time in their culture. If they were switched to thymine media and grown there, though, they could immediately make the transition back to growing on chlorouracil, which shows that their ability to do so was now coded in their genomes. (The re-thymined bacteria, by the way, could be assayed by mass spec as well for the disappearance of their chlorouracil).
These re-thymined bacteria were sequenced (since the chloruracil mutants wouldn't have matched up too well with sequencing technology!) and they showed over 1500 base substitutions. Interestingly, there were twice as many in the A-T to G-C direction as the opposite, which suggests that chlorouracil tends to mispair a bit with guanine. The four-hour-cycle strain had not only these sorts of base swaps, but also some whole chromosome rearrangements. As the authors put it, and boy are they right, "It would have been impossible to predict the genetic alterations underlying these adaptations from current biological knowledge. . ."
These bacteria are already way over to the side of all the life on Earth. But the next step would be to produce bacteria that have to live on chlorouracil and just ignore thymine. If that can be realized, the resulting organisms will be the first representatives of a new biology - no cellular life form has ever been discovered that completely switches out one of the DNA bases. These sorts of experiments open the door to organisms with expanded genetic codes, new and unnatural proteins and enzymes, and who knows what else besides. And they'll be essentially firewalled from all other living creatures.
Postscript: and yes, it's occurred to me as well that this sort of system would be a good way to evolve arsenate-using bacteria, if they do really exist. The problem (as it is with the current work) is getting truly phosphate-free media. But if you had such, and ran the experiment, I'd suggest isolating small samples along the way and starting them fresh in new apparatus, in order to keep the culture from living off the phosphate from previous generations. Trying to get rid of one organic molecule is hard enough; trying to clear out a whole element is a much harder proposition).