GM pratices arent bad per se, but there are some concerns. Most Eco freaks will tell you anything GM is bad, but they dont realize, insulin is made by genetically modifying either bacteria or plants to produce it, so you can have insulin that people arent allergic to. I dont think anybody would argue that is bad, but that can be controlled rather easily.
When you start introducing GM food into a large scale agriculutural system, there are some serious problems that have to be looked into. There have already been cases of GM pollen being spread into the natural ecosystem, producers mixing up GM corn not certified for human consumption with there certified corn.
Like you said, hybridization of crops and selective breeding has been going on since the begining of agricultural socities, but when you start making goats that can produce spider silk, things can get out of hand. When regular crops and animals start to inherit these traits, and then those plants or animals pass through the ecosystem nobody can predict what can possibly happen, it is far to complex and we really have any long term data to look at.
It's kind of like the antibiotic subject, we introduced antibiotics in every possible product we could, killed off all the bacteria that those antibiotics were toxic to, but now we left the bacteria that were resistant with no competition for resources, so they flourish.
So, I wouldnt say GM foods are necessarily bad, but is potentially very risky. And, IMHO not worth introducing into large scale production.
As far as how GM works, its pretty much taking traits out of one organism and putting that trait into another. For example, some plants have a gene that is responsible for producing a toxin for known crop destroying insects. So you take the genetic material that produces that gene out of that plant and implant it into your crop, problem solved you dont have to use a pesticide for that certain insect. And you can still label your crop, organic because you didnt use pesticides.
Same thing for animals, some animals are resistant to certain viruses, but instead of having to buy and administer vaccines and antibiotics, you just incoroporate that certain trait into your herds.
The idea and science behind it is interesting, but is it worth it. Most supporters say, they can produce more nutrional, drought resistant, insect resistant, disease resistant, more flaverful, and all kinds of other things. But what if those plants start spreading uncontrollably, normal plants wont have a chance to compete with that kind competition, and then what if those GM plants are toxic to other organisms that count on the regular plant.
There is a lot of propaganda on both sides of the fence on the subject. But they try to market GM foods as a way to end hunger in the world. Famine and Hunger, have little to do with the ability to produce food, and more to do with who wants to pay for it.
The fact is, in most cases it is used to increase profits and lower risks, not to help nutrional value.