Distinguishing sarcasm from irony

Two researchers have examined at what age children are able to distinguish sarcasm from irony:

Glenwright and Pexman presented five- to six-year-olds and nine- to ten-year-olds with puppet show scenarios that ended with one of the characters making a critical remark. This remark could be literal, aimed at a person or situation, or it could non-literal, again aimed either at a person (i.e. sarcastic) or situation (i.e. ironic). To illustrate: two puppets are playing on a trampoline, one falls on his face. 'Great trampoline tricks,' the other character says, sarcastically. Contrast this with two puppets playing on a saggy trampoline with little bounce. One of them says 'great trampoline', an ironic remark.

Their finding is that nine- to ten-year-olds can tell the difference, although they can't yet explicitly explain it. Four- to five-year-olds, by contrast, understand that sarcasm and irony are non-literal forms of language, but they can't tell the difference between the two.

TYWKIWDBI has an "irony" category which now has 33 entries.  It wouldn't surprise me if I've miscategorized an incident or two over the years.

Addendum:  This might also be helpful:

Few words cause as much confusion or are used incorrectly as often as "ironic." Not that it's hard to understand why - the definition is not simple: "a pretense of ignorance and of willingness to learn from another assumed in order to make the other's false conceptions conspicuous by adroit questioning ... the use of words to express something other than and especially the opposite of the literal meaning."

"In 1969, Susie moved from Ithaca to California, where she met her husband-to-be, who, ironically, also came from upstate New York." Seventy-eight percent of the panel's members agreed that this was an incorrect use of the word.

How "ironic" came to be defined as "coincidence" is anybody's guess, but for our purposes, we like to refer to the following quote from the 1994 film Reality Bites. When Ethan Hawke's character is asked to define "ironic," he says, "It's when the actual meaning is the complete opposite of the literal meaning."

More at the link.  I consider this a better set of defining characteristics than the person/thing dichotomy.