I don't think the concept of a species is well defined. Tiger and lions can interbreed, as can donkeys and horses. And then there are ring species. Biology does whatever it does and then humans try to fit words around it.

Edit: correct mules to horses

You're thinking donkeys and horses. I believe a mule is the sterile result of that interbreeding.

Mules are mostly sterile, but not 100%. Wikipedia reports some cases where female mules have produced offspring.

Interbreeding can be ranked on a scale. The less related the groups are, the more problems there are with reproducing. Perhaps a hard boundary of "species" can be drawn where the probability of successful offspring approaches zero. However, that's difficult to measure in practice.

My understanding is that Neanderthals are now classified as a sub-species rather than a distinct species. So instead of Homo Sapiens and Homo Neanderthalensis (sp?) we have Homo Sapiens Sapiens and Homo Sapiens Neanderthalensis.

It's not entirely unlike dogs and wolves, which can interbreed fluently. There are dozens of subspecies of Canis Lupus (red wolves, gray wolves, etc, etc), and one of them is Canis Lupus Familiaris, the domestic dog.

The current de facto status is that the concept of species does not exist anymore, or more precisely, it mostly only still exists for historical reasons and coherence with it. When talking about genetic identity nowadays there is only the (type) specimen and genetic distance to other individuals. For example, Svante Pääbo and his team set precedence on purpose in not declaring the Denisovans anything but only describing a group of humans that genetically differ to an unexpected degree from modern humans.

how far of a distance before the line is drawn? by that logic chimps are also " a group of humans that genetically differ to an unexpected degree from modern humans."

There are actually three ways to define a species. The morphological species concept, the biological species concept, and the phylogenetic species concept. Species that can interbreed satisfy the biological species concept but there seems to be more consensus among biologists that constructing a phylogeny is the better way to define species.

This somewhat problematic however because there is rarely enough data about a species to create a complete phylogeny of a species and its common ancestors. Additionally, it is thought that this concept would lead to the naming of many more species than we presently recognize. If you’re interested in this kind of thing I would encourage you to check out the link below!

http://www.askabiologist.org.uk/from_the_lab/species-concept...

I don't think that explanation works. In your scenario, you wouldn't expect humans in Asia to have more Neanderthal DNA than humans in Europe.

As the article notes, there seem to have been several significant post-Ice Age re-populations in Europe, of which one or more of the incoming populations may have had little contact with Neanderthals. "Mixed" populations to the east could have survived more intact.