Wrong. There is nothing about Evolution which requires "species development in minute increments." Evolution only requires that natural selection favors (selects) certain indviduals for reproduction over others based on the suitability of those individuals to the environment in which they live. To the extent that such selection favors certain genetic mutations/characteristics and leads to the perpetuation of such genetic characteristics to the exclusion of others, speciation occurs.
Gould's hypothesis on punctuated equilibrium was that rather than this process occurring gradually over millions of generations, in the case of sufficient selective pressure, it would occur in a matter of thousands of generations. Such selective pressure could be provided by catastrophe or geographic isolation.
Under punctuated equlibirium, you have to think of evolution as proceeding like John Travolta's career. Instead of a steady and linear procession, it consists of spectacular bursts of activity interspersed within long, boring lulls of failed attempts at variation :-)