Fountain of Knowledge

My understanding of both terms seems quite different.

Slipstream: Literary fiction which uses science fiction or fantasy to reflect on the human condition. Just as literary fiction is more focused on the internal arc, so is slipstream, but sci-fi/fantasy are used to emphasize the internal arc. You could also fairly say that slipstream is sci-fi/fantasy written by people who literary snobs like.

Magic realism: This term is used for two different things, as far as I can tell. The first is a style common among South American authors (Gabriel Garcia Marquez where there seems to be less of a sharp line between reality and the spirits of ancestors and that sort of thing. It is identifiable by the fact that the authors don't seem to understand that what they are writing isn't real. I read tons of this stuff as a Latin Americaan Studies major in college. Most South American authors would probably be highly offended by the term, since the line is much fuzzier in Latin American culture. Similar elements can be found in writing by some Southern U.S. writers and a number of Asian writers.

The second, more frequent use recently, seems to be like slipstream where fantastical elements play a small part in a largely internal arc, but instead of being part of the whole story, they weave into little bits of the story. As you might be able to tell, I don't really get this except that it provides a convenient plot device in a "straight" work.