I hate root beer. Blech! But I'll take my float with Pepsi.
We have a joke in our house that Michael Phelps is my wife's brother (as in.. hey honey, your brother is about to swim) because they have the same last name. No known relation, though. It's a pretty common last name.
Yes, the bulk from steroids would present a problem in the pool because it would increase drag. You'll notice that all the swimmers are tall and thin. Also, I read somewhere (can't remember where, now) that Michael had several blood samples taken and stored, and agreed to any testing that is available now or would be developed in the future to put to bed any rumors of doping.
The LZR suits do have seams (a zipper up the back, for example) but they are specially welded seams that don't create as much friction as traditional suits. While this helps them be faster, all of the Olympic swimmers had access to these suits. Also, Michael Phelps only wore the LZR for some of his races, not all. The pool itself also helps the swimmers go faster, and it's the fastest pool in the world. The pool is deeper, which helps the turbulence dissipate. Also, most olympic pools have 8 lanes, but this one has 10, leaving the outside lanes empty. This helps keep the water calmer and dissipate.
There are some other great points in this Mental Floss article
6 Reasons Today's Olympic Swimmers are Breaking So Many World Records
Dara Torres, who is 41 (and totally amazing) won two silver medals at these games.
(ok, I think I'm all caught up now!)