Yeah, yeah, still haven't had a chance to register...
Anyway; I believe it does say somewhere that Sectoids are the only species that can directly cross-breed with humans, however it says nothing about gene splicing >
Once enough tech has been researched; for example 'alien cloning chambers' and 'alien surgery' you could perhaps try to research a 'genetics lab' where you could take DNA samples from a live alien prisoner (alien dies in process just to make it a little harder) then try to splice the DNA with a live soldier; their should be a high risk of the soldier dying (genetics is highly experimental); say for example:
60% - soldier dies.
25% - soldier is 'wounded' and must spend 1 month recovering.
15% - soldier is mutated into a cross-breed.
The big question would be... do you cross breed your best soldier to make a powerful cross breed or do you cross breed a weak soldier so that death isn't as big a problem (while not for the team as a whole anyway).
Maybe some aliens could be harder to splice with so the %'s could change.
Anyway this would require a lot of testing to make sure the new units are balanced; they shouldn't be too good or humans will become obsolete.
PS. I do know about the half-sectoids in Apoc, I just meant that the aliens are the ones that started all the cross breeding experiments and you don't even see them in XC1.