You're right that it's going to be hard to deal seriously with issues like the naturalistic fallacy in our little series of missives, particularly for an American audience, which tends to get impatient with philosophical discussions. (In Germany, by contrast, all anyone wanted to talk about was why my interpretation of Kant was wrong.)
But let me clarify a couple of things about the use of nature, and particularly human nature, as a moral standard. At one point you say, "If a pill, or a transplanted gene, could make me a better human being, I'm not sure on what grounds I'd refrain from it." On what grounds do you believe that one can make judgments about what constitutes a "better human being"? Would your child be a better person if your wife could take a pill when she was pregnant that would prevent her from passing on a "gay gene"?
You say that you are a utilitarian, which generally means that the good amounts to maximizing happiness, health, economic well-being, or some other readily measurable good desired by human beings. But human beings pursue incommensurable forms of happiness: Some, like the CEOs recently in the news, seek to do it by making hundreds of millions at the expense of shareholders and employees, while others, like the firemen who ran up the stairs of the World Trade Center—or Mother Teresa, for that matter—do it out of service to others. I presume you wouldn't say that you were indifferent to the virtue displayed by the fireman or Mother Teresa, even if the CEO had a "happier" life. But if you aren't indifferent, it means that you believe that there are moral goods in some way divorced from the subjectively experienced sense of happiness.
I believe that if you do not begin with an explicitly religious premise, you will be driven back on nature as a standard for judging right and wrong. Nature does not provide us with a clear-cut or simple moral standard, because it, as you point out, inclines us in different directions. No natural right philosopher (my own favorite, Aristotle, included) ever thought it did. Certainly instincts of repugnance are not a certain guide, and I would hardly base opposition to cloning or any other new genetic technology on instinctual feelings. Instincts and natural inclinations are only the beginning points of a rational philosophical discussion of possible human ends.
Those discussions, if pursued seriously, usually end up pitting one natural end against another and weighing which, under different circumstances, is more fundamental to our lives. Why is a slave's right to freedom more important than the slave owner's right to a pleasant summer vacation? Because, as human beings, we feel that the slave's human dignity is being violated, which in turn rests on our sense of how fully experienced human life ought to be.
On to the question of what's wrong with genetic engineering. You ask what's wrong with creating a new being "instinctively less prone to hatred and intolerance and violence than the typical human?" Here I would appeal to your own background in evolutionary psychology. Why did evolution put these tendencies in human beings in the first place? Take emotions like hatred and intolerance. These are clearly grounded in human sociability: Human beings are highly social animals capable of self-sacrifice and loyalty to groups, but the flip side of that loyalty is intolerance of people outside the group. A number of evolutionary biologists have in fact speculated that it was precisely the competition among groups, beginning with our chimplike forebears some five million years ago, that drove the development of the intricate sociability of the human species, the rapid expansion of the neocortex, and the like.
The point is that in our evolved human natures, what some might regard as "good" characteristics are tightly bound with the "bad" ones. Intervening to get rid of the latter is thus very likely to produce unanticipated consequences we can scarcely imagine, because we simply do not understand the complex interrelationships that exist within the human emotional system.
Talk about genetic engineering to produce "better" people and fix the defects of nature reminds me of the way people used to talk about big hydroelectric projects like Hoover Dam: the conquest of nature, the mastery by science of the "brute" forces of the natural world, etc. The truth of the matter is that no one in the developed world builds large hydroelectric projects any more because we didn't at the time foresee their complex unintended environmental and social consequences.
This still leaves open the whole question of human nature and rights, but maybe we need to leave that for the next round.