[glow=red,2,300]Warning, Science content ahead![/glow]
It's quite possible that electric types have a high electron count, and when their blood circulates it creates electricity course through their blood as well. If we want to get Scifi about it, the iron n the blood may help too.
Another theory is that, like Mr. Mime, they can control molecules, specifically theirs, and when the molecules move fast enough, friction is created, thus creating electricity.
THey could also have an odd magnetism to them, where they attract electrons and other electricity causing components from their surroundings. Or they just naturally have a high negative energy count. I mean, look at their hair (specifically Jolteon, Manectric, and Luxray).
One last rheory is that they don't even create electricity at all, but rather something quite similar to it. Electricity is essentially light, thereofre travels rather fast. When we see their attacks in game, it goes slow. I know what your thinking, just wait. In fact, just think about it, its quite possible that all the Pokemon aren't really what their types suggest, but rather something very, very close. That would explain how people and Pokemon can survive any battles.
@Pokekid
Well, in the anime, levels don't exist. That would explain how on earth Grotle evolved before Monferno, and Infernape before Torterra.
As far as legendary babies go, yeah, that doesn't make sense, but it also kinda does. THere are obviously more that one of each legendary, other wise nobody would ever hear of them (A perfect example is Johto's Ho-oh and Lugiah, Orre's Ho-oh and Lugiah, and Navel Rock's Ho-oh and Lugiah.). Now, the anime only says that Lugiah wa sits mother, NOT its birth mother. Noone knows how legendaries come to be, but I would guess that a long time ago they could breed at one time, and they laid eggs. These eggs, however, took forever to hatch, so their parents would die out, thus leaving the baby orphaned. Maybe then the Lugiah adopted it so it could teach the baby how to survive.
Man, I'm a geek.