So, if individuals don't evolve how does the species evolve?

Sneakily, a tiny bit at a time, so no one notices. A species evolving is a bit like me growing old. I feel that I'm the same person I was at 17, but the photos prove me wrong.

For xenoscience, this is a book worth reading: What Does a Martian Look Like? The Science of Extraterrestrial Life. It's by the guys who wrote the Science of Discworld books, and focuses on the universals of life (what can be expected to be common to all life in the Universe) rather than the ways life has found its local expression in the Solar System.