Results of various cancer genome sequencing projects have "unexpectedly" challenged the framework of the current somatic gene mutation theory of cancer. The prevalence of diverse genetic heterogeneity observed in cancer questions the strategy of focusing on contributions of individual gene mutations. Much of the genetic heterogeneity in tumors is due to chromosomal instability (CIN), a predominant hallmark of cancer. Multiple molecular mechanisms have been attributed to CIN but unifying these often conflicting mechanisms into one general mechanism has been challenging. In this review, we discuss multiple aspects of CIN including its definitions, methods of measuring, and some common misconceptions. We then apply the genome-based evolutionary theory to propose a general mechanism for CIN to unify the diverse molecular causes. In this new evolutionary framework, CIN represents a system behavior of a stress response with adaptive advantages but also serves as a new potential cause of further destabilization of the genome. Following a brief review about the newly realized functions of chromosomes that defines system inheritance and creates new genomes, we discuss the ultimate importance of CIN in cancer evolution. Finally, a number of confusing issues regarding CIN are explained in light of the evolutionary function of CIN.