Sarcasm and irony

At dinner tonight the family had a short debate about the difference(or lack thereof) betweeen sarcasm and irony. As is common it was everyone against me. I was told that they are essentially the same. Eventually a dictionary was pulled and out and I'd say we reached an uneasy stalemate.

Let's first discuss the first point, and then we'll get to the dictionary. I strongly feel irony is an overused word. I regard it as a theme in a play or movie. I was taught that it simply means when the result is the opposite of what was hoped for. I don't throw the word around lightly. Many people mistake irony for coincidence, like when two people unexpectedly see each other in public. They say it's ironic when it's really just coincidental.
Sarcasm is different. I know it because I have been afflicted with it since I was a child. I guess it's part of having a dry sense of humor. Sarcasm usually shows itself in insulting remarks, sometimes exposing naivete or vanity. The tone of voice or inflection makes all the difference between someone being tiresome and negative or irreverant and funny. One can be sarcastic, but irony just is. It's not something you can be.

I suppose the dictionary is a good reference point for this type of debate. However I do feel there are nuances and that English is constantly evolving, so I don't put all my stock in what Webster says.