About genetics: first of all, as was said up there, grafting plants does not mix the genes. However, doing cross-pollination between plants of different (close) species does mix the genes, because you get parents of two different species that make a third one. If you have a vegetable garden, you can try it, I did it with different varieties of squash and it's very fun. This was studied in depth by
Mendel, the father of modern genetics.
Toady said he wants to mess with random generation of creatures later on, so I don't see why plants would not be on as well. Genetics just fit well into that picture. It would be cool if plants got "body parts" as well, so you could battle giants carnivorous plants (probably the fruit of weird cross-breeding ).
As I said cross-breeding only works between very close species, and the more far apart they are, the higher the chances that the child will be sterile. To take an example from the animal world, where cross-breeding is much more difficult: mules, for instance, are the result of breeding horses and donkeys, and they are sterile. Also, when you plant the seed of a hybrid plant, it will not give another hybrid, but rather one of the genetic parents. Things become even more messy for several-generations hybrids.
All in all, I think experimenting with all that would be very fun (and educative), if it ever makes it in the game.