There was a discussion going on about this over on the Terry Brooks Forum, Shawn (the site admin) is writing an 'urban fantasy' novel and was wondering if his thoughts and ours (re. the ingredients of the genre matched up).
While we all agreed that 'urban fantasy' is 'fantastical elements' in an urban setting' there was some small disagreement on where the urban setting should be. Some of us thought that it had to be in a real world setting, something like Feist's 'Faerie Tale' or Neil Gaiman's 'Neverwhere'/'American Gods' etc. I don't agree. As far as I'm concerned; 'urban' is 'urban' no matter where you set your story, whether it's in 'Old London Town', the labrynthine depths of Gormenghast or the village of Hobbiton. China Mieville's 'Perdido Street Station' was based entirely in the fictional city-state of New Crobuzon, surely that would class it as 'urban fantasy' even though there is no stated connection to the real world (unless you live in London that is, you'll see the similarities straight away).
I could be wrong though, I'm into Epic Fantasy more and have only really started reading the 'urban stuff' this year.
So I'm throwing this one out to you. What does 'Urban Fantasy' mean to you? What would you expect to find in it? Is it mandatory for the heroine to get romantically involved with the vampire she has to kill? Let me know what you think!