Hi Jim:

"Are Lifetime Annuities the exact same product Fixed Immediate Annuities? What's the downside risk of each?"

In general:
A lifetime annuity guarantees an income as long as you live.  There are two types of Lifetime Annuities--fixed and variable.

The downsides
Most fixed annuities do not increase with inflation although Vanguard and a few other companies offer an (expensive) inflation rider.  

Most variable lifetime annuities have no guaranteed payment amount.

There is the risk of company failure.  However, most states will guarantee  annuity benefits up to $100,000.

"Do all Fixed Annuities invest in mutual funds?"

No.  Only variable type annuities invest in mutual funds.

"Fees"

The fees of most annuities with guaranteed benefits are hidden.  Variable lifetime annuities do provide a Prospectus and fees are shown (there may be exceptions).

"The WSJ story quotes a Fixed Immediate Lifetime Annuity for me and my over 60 year old wife at a $273 monthy lifetime payout for a $50,000 investment. Isn't that an approx.6.5% monthly payout ... forever?"

I didn't do the math, but that sounds about right for a couple about 60 years old.  A fixed lifetime annuity provides the highest guaranteed life income of any investment.  Use Vanguard's calculator to get an exact quote:

http://www.aigretirementgold.com/vlip/VLIPController?page=RequestaQuote

"Can someone direct me to a website or company that sells the best and most realible Lifetime Fixed Immediate Annuities? ... the Vanguard of annuities."

Vanguard  annuities are among the best.  However, I was able to buy two lifetime annuities that were cheaper and with good companies by using:

www.immediateannuities.com

"Bob's Financial Website" has great information about annuities here:

http://bobsfiles.home.att.net/AnnuityLinks.html

Best wishes.
Taylor