This got me to thinking, though, and that set me to doing a bit of research, and I found a great little movie review from 2004 that addresses this subject nicely.
Romance is the genre that dramatizes our dreams of ideally effective action against the forces of evil . The white knight learns from his tutelary figure how to defeat the black knight, the ogre, the dragon, and the sorcerer in defense of the damsel and in doing so revives the entire community. He fights for the values that bind the community, earning the deepest gratitude of everyone in it who identifies with the forces of good. This gives dimension to his heroism and explains why he has been a focus of projection for boys since forever.
Irony is the genre that slaps us awake in the middle of those dreams. It apes the structure of romance but fills it in with realistic details that won't cooperate with the fantasy--e.g., Don Quixote tilting at windmills. Irony presents stories based on our lowest estimates of ourselves, saying to us, in effect, "You can fantasize all you want, but you're no hero and your plans never work out as satisfactorily as you hope." (Critics who complain that ironists look down on their characters manage to be correct and to miss the boat at the same time.)
. . . In practice, however, irony and romance aren't so cleanly antithetical. There's often a breaking point at which irony turns into romance. It can be a drag, for example, in the Robin Williams or Jim Carrey comedy that goes soft, "redeeming" the character whose outrageousness has been our main source of entertainment. . . .
Napoleon Dynamite . . . is . . . a deadpan parody of a romance. The title character is a gape-mouthed, drowsy-eyed high-school kid in small-town Idaho who longs for the kind of skills that he imagines will make him popular with girls. (Among the things he considers "skills" are having a "sweet" bike and being able to grow a mustache.) To compensate for his lack of skills he fantasizes, exaggerates, and lies, and it isn't clear that he knows the difference. (He covers notebook pages with drawings of the "liger," a hybrid of lion and tiger "bred for its magical powers," and he talks about this beast not only as if other people could have heard of it but as if it were real.) Napoleon is a loser by most external standards and we're free to laugh at him because he's not even loveable. He has the petulance of an adolescent who's always ready to snap at people because they aren't able to guess what he's thinking. They actually have to ask him questions to find out. Idiots!
Jon Heder gives a classic slapstick performance, something along the lines of the silent great Harry Langdon, that sleepy-headed weirdo baby, after a hormonal growth spurt. You have to see Heder move; he runs, dances, and even swallows in gangly character. And he never appeals directly to the audience but understands that irony is a form of identification with character, with Napoleon's very awkwardness and preposterousness. . . .
Tina Majorino is nearly Heder's equal as the shy but enterprising girl who loves him. A gravely self-serious photo-i.d. photographer and lanyard artisan , she's got her own absurd dimness, an independent source of comedy.
( From “Irony and Romance: The Sliding Scale,” by Alan Dale, October 4, 2004 )