Whether natural selection and genetic drift lead to new species depends on whether there is restricted gene flow between different groups. Gene flow is the movement of genes between separate populations by migration of individuals. If two populations remain in contact, gene flow will prevent them from becoming separate species (though they may both develop into a new species through vertical evolution).
Gene flow is restricted through geographic effects such as mountain ranges and oceans, leading to geographic isolation. Gene flow can also be prevented by biological factors known as isolating mechanisms. Biological isolating mechanisms include differences in behavior (especially mating behavior), and differences in habitat use, both of which lead to a decrease in mating between individuals from different groups.
When geographic separation plays a role in speciation, this is known as allopatric speciation, from the Greek roots allo, meaning separate, and "patric," meaning country. In allopatric speciation, natural selection and genetic drift can act together.
For example, imagine a mud slide that causes a river to back up into a valley, separating a population of rodents into two, one restricted to the shady side of the river, the other to the sunny side. Because coat thickness is a genetically inherited trait, eventually, through natural selection, the population of animals on the cooler side may develop thicker coats. After many generations of separation, the two groups may look quite different and may have evolved different behaviors as well, to allow them to survive better in their respective habitats. Genetic drift may occur especially if either or both populations remain small. Eventually these two populations may be so different as to warrant designation as different species.
It is also possible for new species to form from a single population without any geographic separation. This is known as "ecological" or "sympatric" (from the Greek root sym, meaning same) speciation, and it results in ecological differences between morphologically similar species inhabiting the same area. Sympatric speciation can occur in flowering plants in a single generation, due to the formation of a polyploid. Polyploidy is the complete duplication of an organism's genome, for example from n chromosomes to 4n. Even higher multiples of n are possible. This increase in a plant's DNA content makes it reproductively incompatible with other individuals of its former species.
R. John Nelson
Futuyma, Douglas J. Evolutionary Biology, 3rd ed. Sunderland, MA: Sinauer Associates, 1998.
Mayr, Ernst. Evolution and the Diversity of Life: Selected Essays. Cambridge, MA: Belknap Press, 1976.