The Habsburg dynasty was the dominant force throughout central and western Europe for around six centuries, until defeat at the hands of Napoleon in 1805 and Prussia in 1866 signaled the end of their supremacy. Unlike other bloodlines, the Habsburgs secured and maintained this hegemony not through conflict but through skillful manipulation and collaboration.
Some of the most effective tactics employed by the Habsburgs over the years were carefully arranged marriages between the family and other ruling pedigrees, strengthening links and extending the Habsburg sphere of influence.
Soon, the Habsburg presence had spread from its roots in Germany into Hungary, Bohemia, Croatia, parts of Poland and Italy, as well as the Netherlands and Spain. Such prevalence would scarcely have been possible if more direct, aggressive tactics had been employed. The Habsburgs, a Germanic family, now ruled over Slavs, Magyars and many other ethnic groups that would ordinarily have revolted against their foreign lords.
However, arranged marriages brought with them a price. If no fortuitous coupling could be found, the priority was to maintain the purity of the Habsburg line. For this reason, marriage between cousins, and even closer relatives, became common in certain areas.
Soon, genetic defects began to appear, and multiply, in some branches of the Habsburg family tree. Among the common defects was mandibular prognathism syndrome, or the Habsburg Lip. It caused the lower mandible to be especially prominent, and the lower lip to be grossly enlarged. The most famous case is Charles II, last of the Spanish Habsburg line. His jaw was so disfigured that he could not chew his food. In addition, he was mentally retarded and impotent.
Clearly, such traits could eventually bring the Habsburg line to an end, but the Austrian branch of the family maintained healthier marriage choices, and survived as an influence until the 1920s.
Nowadays, the Habsburg Lip is a topic of much interest to geneticists, as it supports various theories about inheritance and inbreeding. The trait has been traced through thirty-four generations of the family, surfacing at various points. Worryingly, there appears to be certain connections between the Battenburgs, a.k.a. the British Royal Family, and the Habsburgs, as well as various other monarchies throughout Europe. Maybe there's a reason Prince Charles, future King George VII, has such `striking' features...
Sources:
The Imperial House of Hapsburg: Österreich Über Alles - http://www.hapsburg.com/
Michigan State University - http://www.msu.edu/