
The flying insect would originally lay it's eggs in the worm, (like some wasps do today I think), but when the new insect hatched out of the worm, it somehow helped the reproduction of the worm (taking the worms eggs with it or something?) - and eventually the flying insect's eggs were simply laid inside the worms eggs, and they became completely dependant on one another.
So the worm hatches from it's egg (which was laid by the insect), with the insect egg already inside it, the worm goes around eating and growing and starts to produce eggs of it's own - at which point the insect egg hatches, eats the worm from the inside out (pupal stage), and flies away taking the worm's eggs with it - the insect then puts it's own eggs inside the worms eggs, and lays them, so it all starts again.
Anyway if someone can say with some authority that it's absolute bollocks, then I'll be able to put it out of my mind. Otherwise it might make for an interesting discussion about co-evolution.
