Has the Venter Institute created artificial life?

In a sense, yes, but in my view, mostly no.

Wall Street Journal: Heralding a new era in biology, scientists for the first time have created a synthetic cell, completely controlled by man-made genetic instructions, which can survive and reproduce itself, researchers at the private J. Craig Venter Institute announced Thursday.

"We call it the first synthetic cell," said genomics pioneer Craig Venter, who oversaw the project. "These are very much real cells."

What the Venter Institute scientists did was to create a complete, artificially sequenced genome, insert it into an existing bacterium cell, and thereby cause that cell to transform itself into a different species, which can reproduce itself in the new form. This new form has characteristics that distinguish it from other bacteria of the same species. This is a significant advance in biotechnology, which previously has been limited to splicing segments of genetic code onto existing genomes, thereby changing in some respect the characteristics of the cells with the altered genomes.

The use of existing, living cells as hosts for the artificial genomes means that life has not been created, as it were, from the ground up. It would, I imagine, be possible to do that by synthesizing from inorganic sources the chemicals that make up the body of the cell, assembling an artificial cell body from them, then inserting an artificial genome including nucleotides that themselves have been synthesized. This, I suppose, would be a very difficult project. Someone may do it some day, just to be able to say it could be done. The availability of ready made cell bodies to serve as hosts for artificially sequenced genomes, however, means there is probably no practical reason for such an undertaking.