Let's go over some basics on transposable elements and their relationship to the argument for evolution, specifically the common ancestry of humans and chimpanzees.
Transposable elements were discovered by Barbara McClintock in the first half of the twentieth century. You can read her original paper describing the discovery for free:
McClintock, B. 1950. The origin and behavior of mutable loci in maize. PNAS 36:344-355.
Today we know that transposable elements are stretches of DNA with the ability to copy and move (transpose) to new locations in a genome. This can happen in a single cell quite apart from the usual duplication of DNA (replication) that occurs each time the cell divides. As a result of transposition, transposable elements can increase in number in a single cell. When transposition happens in germ line cells, new transposable elements can be passed to offspring.
There are two major types of transposable elements: DNA-based transposons and retrotransposons (which move about by an RNA intermediate). Retrotransposons bear a striking resemblance to RNA-based retroviruses, like HIV. A typical eukaryotic genome - like the human genome - might contain thousands of copies of transposons and retrotransposons.
With regard to origins, we can ask two sorts of questions: (1) What is the origin of the many transposable elements in organisms' genomes? (2) What is the relationship between transposable elements and the origin of species? The first question has two corollaries: (a) What is the ultimate origin of transposable elements? (b) How were the thousands of copies generated?
The ultimate origin of transposons is unknown, but retrotransposons are believed to have derived from retroviruses. The connection between retrotransposons and retroviruses is based on significant sequence similarity between the two. The many copies of transposable elements were thought to be generated by their ability to transpose.
With respect to the relationship of transposable elements to the origin of species, McClintock (discoverer of transposable elements) believed they were a means of remodeling a cell's genome in response to stress, as indicated in this passage from her Nobel Prize speech:
In the future, attention undoubtedly will be centered on the genome, with greater appreciation of its significance as a highly sensitive organ of the cell that monitors genomic activities and corrects common errors, senses unusual and unexpected events, and responds to them, often by restructuring the genome.You can read the whole speech for free here:
McClintock, B. 1984. The significance of responses to the genome to challenge. Science 226:792-801. [PDF]
Other researchers suggested a different interpretation: that transposable elements were just the genomic equivalent of parasites. Just like parasites harm other organisms in order to complete their own life cycle, transposable elements were thought to use the cell's genome as a place to be fruitful and multiply. This presumably places a burden on the cell when it comes time to replicate, since the genome is bigger after transposition and requires additional energy to replicate. This hypothesis was described in two back-to-back papers in Nature in 1980:
Doolittle & Sapienza. 1980. Selfish genes, the phenotype paradigm and genome evolution. Nature 284:601-603.
Orgel & Crick. 1980. Selfish DNA: the ultimate parasite. Nature 284:604-607.
Since then, some researchers have continued to insist that transposable elements play an important role in generating the kind of genomic changes that can lead to speciation. I've discussed this matter on more than one occasion on this blog (here, here and here). These researchers often do not view themselves as contradicting the selfish, parasitic DNA hypothesis. For example, Kidwell & Lisch wrote in 1997, "The idea that TEs are primarily parasitic is not at all inconsistent with a role for these elements in the evolution of their hosts." See more in their free PNAS paper:
Kidwell & Lisch. 1997. Transposable elements as sources of variation in animals and plants. PNAS 94:7704-7711.
With regard to the origin of the human species, when the chimp genome was sequenced, it was found to contain nearly all of the transposable elements that the human genome had. The transposable elements were arranged in the same places on chromosomes that were >95% identical in their sequences. I summarized these findings in a paper for OPBSG in 2006. The presence of many transposable elements in the human genome implied that they originated by transposition, and the presence of the same transposable elements in the chimp genome implied that humans and chimps shared a common ancestor. Why? Because of the staggering similarity.
Let me offer a few closing observations. First, it is false to say that the connection between retroviruses and retrotransposons is just speculation or irrational. There is significant sequence similarity between the elements, which rules implies an ancestral connection. I discussed this in more detail when I discussed Liu and Soper's proposed "exogenization" of retrotransposons, an attempt to account for the similarity of retroviruses and retrotransposons.
Second, it is misleading to say that transposable elements are "functional" or "essential." The vast majority of transposable elements in the human genome are nonfunctional copies that have been damaged(?) by point mutations. To my knowledge, there is no evidence of essential function for most of these transposable elements. Indeed, some eukaryotes (like baker's yeast) that have comparatively few transposable elements.
Third, the argument for the common ancestry of chimps and humans depends in no way whatsoever on the functionality of transposable elements. The argument is more compelling if the sequences are purely parasitic, but the overwhelming similarity still implies that chimps and humans could have shared a common ancestor, even if transposable elements had an essential cellular function. In my chimp genome paper, I challenged myself and my fellow creationists to account for biological similarity in a creationist context. To date, the challenge has not been met.
Fourth, McClintock herself proposed an important functional role for transposable elements. Functionality was not the exclusive prediction of creationists. It is definitely false to claim that evolutionists did not propose functions for transposable elements.
Fifth, peculiar examples like the transposable elements of Oxytricha and other ciliates do not provide a solution to the question of functionality of transposable elements. Such things only highlight the oddness of transposable elements and the idiosyncratic roles they play in certain cells. In other words, the occasional transposable elements that do some important job for their host cells emphasize the lack of a general "functional" role for transposable elements in other cells.
Sixth, transcription does not equate to cellular function. It just isn't the same thing. It's interesting, but not even close to conclusive.
Seventh, function does not equate to design. It just isn't the same thing.
How can creationists begin to tackle the challenges of transposable elements? (1) Global studies. Compiling second-hand accounts of idiosyncratic "functions" of transposons just does not address the main problem: Why are there so many and why can they transpose? (2) More imaginative work like Liu and Soper's exogenization proposal. Solving these problems will require us to think weird.