While any discussion of evolution is fraught with ambiguity, I contend that evolution has indeed been observed. If we define evolution as the change in the gene pool of a population, such that two or more populations emerge that while both fertile amongst themselves, cannot interbreed to form fertile offspring. This is to say that evolution is a process where selection leads to speciation.

In the '60s, Dobzhansky selected two groups from a population of drosophila, and repeatedly inbred them. He found that the two groups had become so different that while they could reproduce amongst themselves, the two groups could no longer interbreed successfully. This is admittedly speciation through artificial selection, but it demonstrates that evolution can occur in the wild.

Another observed case of evolution is the 'ring species'. Ring species occur when a 'similar' animal has a very wide range (the circumference of the earth, for instance). While nearby individuals can and do interbreed, individuals from points far apart on the 'ring' can look very different, and produce sterile offspring. For an extreme example of evolution, if one was to exterminate enough of the intermediate individuals, those that remained could no longer exchange genes in any way, and would be two different species. Examples of ring species include the herring gull, and salamander.

The final criterion, I suppose, is the appearance of entirely new characteristics through mutation. Dogs, for instance, were not originally 8 inches long. Highland cows used to be black. But does this count? These could all be merely selection of latent, recessive genes. All the really interesting mutations (feathers, bones, jaws, lungs, etc.) are only evidenced in fossils, Archeopterix being the most famous. I'm open to suggestions, as far as mutations leading to new species in historic times goes.


http://www.talkorigins.org/faqs/speciation.html
http://www.cs.colorado.edu/~lindsay/creation/ring_species.html