http://www.sfsignal.com/archives/2010/07/mind-meld-what-sword-and-sorcery-means-to-me/

Thought this article was interesting, here are a few quotes that stood out:

"Basically I see it as a good old-fashioned sword and sandal or cloak and dagger drama with strong supernatural elements. Captain Blood meets Cthulhu."

"Sword and Sorcery settings tend to be seedier, grimmer, smellier, trashier, uglier, more urban places than their epic fantasy counterparts. Fewer white towers, more dark brothels. Less sweeping mountainscapes and more stinking alleyways."

"The heroes are working class guys, within the context of the story and mores of the time when it was written. They are guys who get stuff done but you would not want them in the drawing room for high tea because they smell bad, break things, and leave bloody messes all over. Despite their class, or lack thereof, they are not much into progressive politics, seeing that sort as easy meat."

"With that said, 'swords and sorcery' suggests to me a style of fantasy in which the protagonists tend to have a fairly high level of self-interest or even selfish interest. They may certainly find themselves saving the world, but there's nearly always some degree of greed or personal ambition also driving the story.

It also suggests a narrative style in which world-building is deliberately nebulous and secondary to character-driven action. Richness of description tends to be valued more highly than mere plausibility-- sword and sorcery milieus are places that can endure some stretching and exaggeration, often to advantages."