pick 'n' mix
This isn't really my idea. The phrase is stolen from M. John Harrison, but it's been buzzing in my head for a day or two, after Gabe Chouinard made this post.
Imagine literature as a candy store. In the candy store are a series of pick 'n' mix stands. Each stand represents a genre and is appropriately labelled. There's the Mystery stand, next to it is the Romance stand, there's Fantasy, etc, etc.
Now, at each stand is a wide variety of candy. Each candy represents a particular convention of the genre. So at the fantasy stand, there's candy representing elves, dragons, simple-minded farmboys, big swords, and possibly maybe even some candy you might want to eat.
It's the same at the Mystery stand. There's a big tray of belgium super-sleuthes, ex-cons turned PIs, and so and so forth.
Now, here's the big secret: you can take your candy from any stand in the store. You can if you want, it's up to you. But you shouldn't feel constrained.
Because that's what genres have a tendecy to become: constraints. They shackle the writer. And the worst thing is: people don't even see it. They include magic in their fantasy novels because... well, because it's fantasy. Genre conventions are included mindlessly, because that's the genre. But fantasy doesn't need magic - just read the Viriconium stories. I'm not saying it shouldn't be included, but when it is, it should be for a good reason. (A great example of this is K. J. Bishop's master The Etched City).
Genre conventions are the starting point, the launchpad. They should inspire creativity. The Dogme movement in cinema is a wonderful example. In literature, the OuLiPo model is also exciting, though it frequently limits itself to simple word games. Limits should inspire the writer to find new ways to work around them, to express what he/she is trying to express in new and exciting ways. Instead they become... well... conventions.
I think the strength of the pick 'n' mix model is that it emphasizes the arbitrariness of the ruleset. And, by exposing that arbitrary nature, it encourages the writer to move beyond it. Instead take the candy you like from any stand in the store. Create your own... well not entire genre, but sub-genre. Just like Paul Jessup did with Post-Industrial Fantasy. Here he manages to create something that's close to what genre should be: a do-it-yourself, pick-n-mix, home-brewed creation that inspire rather than constrains. You may not like Post-Industrial Fantasy, it may contain no elements you like, but that should simply prompt to create your own sub-genre. Hell, create ten, and only ever write one story for each sub-genre. But take control of genre.
Don't be genre's bitch.