>I've gotten into debates with my friends over were Science Fiction turns into Fantasy, and some stories really blend the two.

I thought the difference was that in science fiction, all mysterious things occur because there's some rational, scientific reason, even if this reason isn't explained. Thus the name 'science' fiction.

On the other hand, in fantasy, mysterious things happen because of magic (or other 'non-rational' means).

Thus, you can get combinations of the two, where 'scientific' and 'non-scientific' ideas feature.