I know it's a subgenre of scifi and fantasy, but what are the defining characteristics? What makes a story slipstream?
Slipstream is genre fiction with sci-fi or fantasy elements that aren't crucial to the plot, but provide setting and background.
Slipstream fiction may or may not have significant fantastical or science fictional elements. It seems the most critical factor in labelling a tale as slipstream is the sense of cognitive dissonance created by a realistic setting with elements of the sf&f genre introduced to produce a surreal effect. See Slipstream(genre) and this review.