On Dune being SF.
Repeating myself here, but, it's not setting but THEME that makes Dune SF. The question of what it means to be human in the face of omnicience. If Dune were fantasy, that question would never be explored. It would be taken as given and move forward from there. However, Dune IS SF. It examines in great detail what it means to be human when faced with ultimate knowledge. Are the Atredies (sp) even human anymore? What is free will if the knowledge is perfectly known? All of these are classic SF themes.
That's why I use thematic distinctions between genre. Setting wise, sure, you could draw some serious parallels between Dune and Fantasy. I don't deny that. But, thematically, it's not fantasy.
Fantasy, as a genre, deals with with wish fufillment. That's why I place Star Wars square into fantasy. It's pure wish fufillment - the "ordinary farm boy" leaves the farm and saves the galaxy, while becoming incredibly, personally powerful. About the only more wish fufilling you could get would be if Leia wasn't his sister.
Contact is not about wish fufilment - it examines (rather slowly and excruciatingly) how our world would react to the existence of aliens. "Meeting the other" is pretty much a stock SF theme.
That's why I don't really go into hard vs soft SF. The differences are there, for sure, and SF is certainly divisible into smaller sub-genre. But, thematically, they usually share a great deal. Take an element, a development (omniscience, computer controls, transcendence, whatever) and examine how that element or development relates to how we conceive of humanity.
Fantasy, OTOH, takes some element and simply uses it as a tool to resolve the plot. The existence of magic in LOTR is not examined at all. It's simply taken as a given and then the societies look an awful lot like real world ones. It's classic Campbell hero's journey.
As an aside, for me, this is why I like fantasy RPG's and not SF ones. Examination of humanity is interesting to read about, but, not so much fun to play. Most SF games devolve into D&D with space ships. If I wanted that, I'd play D&D. Which I do and it makes me happier.