Fantasy: Something that could never happen.
Fiction: Something that could happen but doesn't.
I dislike fantasy. I will go so far as to say the H-word on this. Of course, there are exceptions to every rule, like Tolkein and Dracula ... but yeah, I hate fantasy. So here's my rule: fantasy is something that as far as we know, could never happen. This includes aliens that take on human characteristics, vampires, werewolves, coming back from the dead, and several others that I just can't think of right now. Please don't make me borrow these types of books. I will read three books of something like Bite by Richard Laymon and realize it's not someone who thinks she's bitten by a vampire but really it's some mixed up underground kid. It's really about vampires and then I will throw the book on the ground in disgust. Blah. Screw that, there's enough wierdness in real life, why do I need to get mixed up in that crap?
There is an exception in the genre -- books that start out in reality but make some break due to a tramatic event. This is evident in Rice's Violin when the main character's husband dies and she starts seeing the violinist and she can't tell if it's because of the trama or if it's really happening. This covers most of Koontz's books where whichever cop is trying to find the robbers or the killers and can't figure out why they can't get to them.