In the Better Late Than Never Department, I only just discovered Gwenda Bond's article "Fantasy Goes Literary," which appeared in Publishers Weekly way back in March. (Where was I??? I've only been waiting years for PW to publish something like this.) "Novels featuring prominent fantasy or supernatural elements have found an eager new audience in the literary world," Gwenda notes, then goes on to discuss writers such as Alice Sebold, Audrey Niffenegger, Jonathan Lethem, Michael Chabon, Susanna Clarke, Lydia Millet, Kevin Brockmeier, Kelly Link and many others who regularly cross (or simply ignore) the mainstream-fiction/genre-fiction divide. She mentions the role played by The New Yorker Magazine in creating a more-favorable publishing climate and readership for literary fantasy through its publication of fantastical works by Brockmeier, Chabon, George Saunders, Stephen King, and others. (I'm inclined to thing that 20 years worth of dedicated genre-crossing in The Year's Best Fantasy & Horror volumes might have had some small influence too.) It's an excellent, timely article -- even for those of us whose idea of timely is running four months late...
Midori and I also highly recommend Gwenda's blog, Shaken and Stirred (for book reviews and more), and Say..., the delightful small press magazine she co-edits with Christopher Rowe.