Lots of information here
http://www.talkorigins.org/faqs/wells/haeckel.html
Wells and Haeckel's Embryos
A Review of Chapter 5 of Icons of Evolution
by PZ Myers
.............What's wrong with "gill slits"?
Wells is quite unhappy with the common term "gill slits." He spends several pages telling us that embryonic mammals don't have gills, and that even at the stages that fish have gill slits, they don't have gills. He is missing the point, however: nobody has claimed that they do have gills. They have "gill slits," a completely different thing altogether. He has gotten so wrapped up in a trivial etymological argument that he has lost all sight of biological reality.
Vertebrate embryos universally have prominent structures in their neck region that are called by various names in the scientific literature: branchial, pharyngeal, or visceral pouches or grooves or furrows or arches. Because they may appear as a repeating series of slits in the neck of the embryo, resembling the pattern of repeated elements in the neck of adult fish, they have also been colloquially called "gill slits" or "gill pouches." They are not, however, gills - and scientists have not been claiming that they are (Wells even quotes several authors, Wolpert and Rager, who explicitly state this simple, obvious fact). So what are they?
"Gill slits" are common structural elements of vertebrate craniofacial development. "Common" is the important term here. It turns out that all vertebrates build their face in the same, somewhat improbable and counterintuitive way; it is this deep similarity that is the root of the evolutionary argument that it reflects common ancestry.
The head of all vertebrate embryos, whether they are a fish or a human, can be simply described as a curved tube largely made up of presumptive brain (Figure 2), with a series of 4 to 7 finger-like tissues hanging down from it, the pharyngeal arches. What we consider a face, everything from just below the eyes, back to the ears, and down to the neck, is absent. Instead, we have these dangling blobs, each of which will contain a cartilaginous rod, a column of muscle, a significant branch of the circulatory system, and an assortment of other cell types. These arches are reiterated modules that will subsequently merge and rearrange themselves (along with other cranial tissues, most importantly a migrating population of cells from the top of the head called the neural crest) to form the more familiar face. They do so in similar ways in all vertebrates: the first pharyngeal arch, for instance, always forms the jaw, and the second arch always forms the hyoid. There are also differences that emerge in different classes. Pieces of the first two arches find their way into bones of the mammalian ear. The third and subsequent arches in fish end up in the gills, while those same arches in a human form a series of cartilages in the throat. The third fuses with the hyoid, the fourth forms a major part of the thyroid cartilage, and the fifth forms the cricoid and arytenoid cartilages. Non-cartilaginous elements of these structures end up incorporated into all kinds of tissues, glands and muscles and epithelia, of the neck and face..........
