There are verifiable genetic differences.
After all, skin color is a genetic trait. So we have visible, verifiable proof that there ARE genetic differences. There are others - African DNA tends towards a certain set of traits, European DNA towards another, Asian towards yet another, and Native American towards another. Why is this?
Evolution. Environmental pressures were different in every region of the world, meaning different genetic variations would survive. Given enough time and kept from mingling, we would have ultimately evolved into separate species.
Intelligence is something that is positively ill defined and there is no consensus on what it actually means. However, most of the scientific community is pretty sure it comes from the transposition of two things: Genetic predispositions towards certain behaviors (Which will vary between races because of the aforementioned selection differential) - commonly known as instinct - something that the VAST majority of the "civilized" world has suppressed and no longer "believes" in (but for a really nice example, go raise some kids, shelter them from any and all mention of "sex" for their entire lives, and then be SHOCKED AND AMAZED when they still manage to do it despite never having seen, heard of, or spoken of it), and social shaping.
Contrary to what the PC crowd wants us to believe, societies are not all equal, and thereby shape their inhabitants in different ways. This is REALLY where the whole thing breaks down from science into politics - but the simple fact of the matter is that conditioning makes it VERY difficult to change a society in even fairly minor ways. See: Revolutions.
Yes, revolutions are MINOR societal changes. A MAJOR societal change is something like "alright, lets stop all the drug use, all the promiscuous sex, all the teaching 10 year olds how to fire AK47's, all the clan warfare, institute a republic, give women rights, build an infrastructure and an economy. All at once. Oh yeah, and we need to do it to the whole continent at one, otherwise those guys next door will just come over and break shit." THAT'S why there's not much hope in Africa. It's possible, but it's not something that can be done by outside force, as politicos seem to think. That sort of change has to come from the inside, and will take decades - if not CENTURIES. We aren't even there with South America - and that's even got a very heavy influence from the European fork. But then, who's really to say that the AmeriEurAsian fork is any more or less societally "right" than the African fork? Just because we have our human rights which are inalienable from any human, does that give us the right to impose that upon other groups of people who DON'T subscribe?
It's not genetics that's at fault, but it's certainly a contributing factor. No idea if Watson's a racist. Don't care. He has a point, and it's probably a good thing that people are hearing about it. Shame about his career, though.