I'm having a problem defining my novel, too. I've referred to it as "women's fiction" in my query letter but I'm not sure it really fits there.
An agent who rejected it said that it wasn't commercial enough for her, but I don't know if that referred to the style (though I can't see my work as being "literary") or to the plot (selling a book that revolves around suicide and mental illness will be difficult). So if it's not commercial fiction, then what is it?
I worry about this only because agents and publishers want to know that the authors are knowledgeable about the market and where their book fits in.