Okay, so if I understand correctly, pretty much all sentient life on Nirn began with the Ehlnofey. These then branched off to become the Aldmer, various human races like the Nedes, and the beast races. The Aldmer were the progenitors of the Mer, while the Nedes emigrated to Tamriel from Atmora and eventually became the Men as we know them now, i.e. the Nords and Imperials. At some point Men interbred with Mer and, after some generations, produced the Manmer - Bretons. Redguards originated from Yokuda, and because of this are said to have different "blood" from other Men, but they're still Men. Is that pretty close?

We know Men and Mer can produce offspring. Nedic Men and Yokudan Men can produce offspring, so having "different blood" must not mean that they're something completely separate from other Men. They still had Ehlnofey ancestors, correct? The distinction between Man, Mer, and Manmer is really more like subspecies than completely separate entities. And should "Manmer" even be its own classification? In-game, Bretons are considered Men, but unlike Nords, which were directly descended from the Atmorans, Bretons are a mix of Atmoran and Aldmeri ancestors.

I have no idea if this is really correct, but I'm thinking it breaks down something like this (I've left out the Akaviri and beast races just to keep it simple for my little pea-brain):

Ehlnofey:

— MAN:

~ Yokudans (Redguards)

~ Nedes*:

- Nords

- Imperials

— MER:

~ Aldmer*:

- Altmer

- Bosmer

- Chimer

- Dwemer

- Others

*Nedes + Aldmer:

- Manmer (Bretons)

Kinda sorta more or less? Basically, they all come from the Ehlnofey, and the different "races" are more along the lines of breeds of dogs. A Chihuahua is very different from an Alaskan Malamute, but they're all still dogs. Only, unlike dogs, certain Ehlnofey "breeds" have had more divine intervention to make them unique instead of just simply being genetically different. Am I even close at all?

Gosh, I think I've just confused myself even more.

Yes that is pretty much spot on.
There are Maomer, Yokudans and the like too.
Who is what race is not so much as who can breed with who, as it is on Earth, but more a case of what culture you are born into.
Youre pretty much always going to look mostly like your mother, presumably to give a child a chance of survival in an environment where a sire need not only worry about rival males of his own species.

You forgot Khajiit, who are related to the bosmer.

The only native race in Tamriel that is not Ehlnofey is the Argonians. In addition, the Tsceci (snakemen of Akavir) belonged to the wandering Ehlnofey, who eventually became man, if the annotated anuad is accurate.

Nice little phylogenetic tree.

I don't believe there ever was an Aldmer race and that it is just something the denizens of Alinor say to themselves in order to make them feel superior.

No! They are not in the same litter as the Khajiit.
But we all were once the forest people. The Ehlnofey, that's how they called themselves.

Other than some ambiguity with the Khajiit/Bosmer branch, I believe http://img97.imageshack.us/img97/9691/racetree.png is accurate.

Don't know why they'd do that. According to Altmer logic the Aldmer were objectively better than them. It's not like it would make a lot of difference either. So the Dunmer and Orsimer came from Altmer instead of Aldmer, so what?

To prove that they are superior to the other Elves, to say that they've stayed closer to their "supposed" ancestors.

So you're saying that the Altmer are just projecting all their virtues onto their ancestors? That's interesting, but nobody really disagrees with the Altmer view of their ancestors, you'd think some of the Dunmer or Orsimer would be all "My dad says that his grandfather said that his mother's cousin said that her great grandmother said that the Aldmer were NOTHING LIKE THAT!".

In all honesty I think the Dunmer and Orsimer have cut all ties with their cousins.

Well, yes, but we still have no reason to believe that the Altmer are lying about Aldmeris.

What I'm saying is that other races (who have no reason to sugar-coat the truth) seem to describe the Aldmer similarly to the Altmer, therefore corroborating the Altmeri view.

OK Good points.