Molecular studies have revealed unrecorded microbial sequences in many natural samples to the extent that new kingdoms of life have been discovered in the Domain Archaea.

A few studies have examined the impact of the gut microbiota on the establishment of human pathogens and parasites in their insect vectors. Gnotobiotic insects (Greenberg et al, 1970) were used to provide evidence of the bacterial pathogen-suppressing ability of the microbiota of Musca domestica and Lucilia sericata.

Source: http://lamar.colostate.edu/~insects/systems/digestion/plenuryrd.html

We will not be so bold as to say conclusively that the microbiota of the housefly - both the disease causing microorganisms and the other microorganisms that suppress them - are exactly what the Prophet (peace be upon him) was referring to. We must show some caution and self-restraint when dealing with the sacred texts and interpreting what they mean.

This is especially true since our scientific knowledge is quite limited. What we know about the natural world is by far less than what we are ignorant of. There could be other qualities of the biological environment of the fly's surface and internal environments that we still do not know about. Therefore, it could very well be that the Prophet (peace be upon him) was referring to something else about the fly for which we have yet to acquire scientific knowledge.

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Some of us might find the idea of dunking a fly in our beverage, removing it, and then taking a drink unsettling to say the least. This is especially the case if we have had the privilege of living our lives in a modern society, free of hunger and starvation, where a certain standard of cleanliness is maintained in the environment and it is relatively easy to protect our food and drink from flies and other pests.

However, a ruling such as the one mentioned in the hadîth becomes painfully relevant to those who live with hunger and in less sanitary environments where protecting food from flies is not so simple and throwing away food and drink is not so easy an option. Such an environment was that of Arabia 1400 years ago, and regrettably, there are still many places in the world where we find scarcity and what by today's assessment are sub-standard living conditions.

People under such circumstances quite often do consume food and drink that has come in contact with flies. If they had to discard all such foods, it would impose a serious hardship upon them.

Also, this hadîth is not obligating Muslims to drink beverages in which flies have fallen. It is just advising them as to what to do in case they wish to do so. A Muslim does not have to eat or drink anything that he feels an aversion to consuming. Today, most of us would understandably be repelled by the notion of drinking a beverage from which a fly had taken a sip, let alone fallen into.

Islamic Law takes such natural aversion into account. We can see how Prophet Muhammad (peace be upon him), when he was served a spiny-tailed lizard to eat, refrained from partaking of it. Khâlid b. al-Walîd noticed this and asked if eating the meat of the spiny-tailed lizard was unlawful. The Prophet (peace be upon him) replied: "No. It is just that it is not found in the land of my people, and I find myself disinclined to it." He did not eat it, simply because it did not agree with his disposition. It was not a question of whether or not its flesh was permitted by Islamic Law.

We can apply the same ruling to a drink in which a fly has landed.

And Allah knows best.

Source: http://www.islamtoday.net/english/show_detail_section.cfm?q_id=939&main_cat_id=31