A few words about what the shreck Alternate Reality is.
There's a small but highly interesting genre of Fantastic Fiction known as Alternate History, wherein some actual historical event is altered (i.e., Napoleon won at Waterloo, or Hannibal stayed on his side of the Alps), and the consequences of such an historical altering are explored and extrapolated.
There are two subgenres that I can discern under Alternate History: Steampunk and Alternate Reality, each of which overlaps with Science Fiction and Fantasy respectively.
In brief: Steampunk includes the convention that somehow - often through the slightly more fantastic than scientifically possible medium of time travel - incredible scientific developments are introduced into history at a much earlier date - such as heavy atillerary in Alexander the Great's hands, or surveillance technology in the Mayan Empire.
Alternate Reality generally includes some form of magic possible in our historical past.
The latter is very close to but should not be confused with Urban Fantasy, in which the impossible (magic) is possible in modern society (often the grunge world), nor with Tolkeinesque sub-created worlds which are similar to our own but are distinctly another world altogether (see In a World of Their Own for this as yet unnamed form of excellent literature).
Alternate Reality always takes place in our world with our history but with a significant change in What Is Possible. Really, the best way I can think to describe it is Alice going through her looking-glass.
For a quick guide to this, please also take a look at the Glossary, and the Hierarchy of the Arts Chart (the third and fourth ones particularly). Top

Patricia Wrede
A multitalented authoress, Patricia Wrede is also known for her Sword and Sorcery, as well as her delightful Young Adult novels. However, some of her best and most ambitious work has been in the area of Alternate Reality, most noticeably, in her Regency Fantasies. Top
Caroline Stevermer
An interesting authoress, I became "hooked" on her half of Sorcery and Cecelia (see above) following the adventures of Kate. Thus armed with romantic sensibilities, I rushed out and bought another of her Alternate Realities, A College of Magics. Ms. Stevermer has a new book out, When the King Comes Home, which is set awhile before A College of Magics, which has yet to be reveiwed. Top
Andre Norton & Rosemary Edgehill (eluki bes shahar)
Another pairing of acclaimed authors, The Shadow of Albion series is Norton and Edgehill (a.k.a., Alice Mary Norton and eluki bes shahar) Top
Elizabeth Marie Pope Top
Terry Pratchett Top
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