Because it's somewhat necessary in understanding what I mean when I discuss urban fantasy, I'll briefly outline my distinction between what I consider to be two very different forms of UF. For the record, I've only found one source that draws similar (but not the same) lines as do, so these are terms I've created to delineate my metanalysis and are certainly not the industry standard.
Urban fantasy, from an overarching view, is a subset of fantasy that features an urban setting regardless of the universe (but if it's not in a city yet still in the real world, it's either contemporary or historical fantasy, depending on the time period).
Traditional urban fantasy (TUF). Originated in the 80s with authors such as Charles de Lint and Emma Bull. Modern-day comparisons might include Neil Gaiman and Catherynne M. Valente's Pailmpsest. They have a lilting, literary feel that cleanly incorporates fantastical elements in an urbane setting. The connections between the characters is emphasized, and there might be sex and/or love, or there might not.
Modern urban fantasy (MUF). Originated in the 90s with authors such as Laurell K. Hamilton [and I can't remember who else--anyone know?]* and extending into the 2000s with others like Kelley Armstrong, Patricia Briggs, Rachel Vincent, Carrie Vaughn, etc. Usually MUFs feature a reportedly badass lead heroine (though not always: Jim Butcher and Rob Thurman) and contain romantic elements (perhaps even a romantic subplot) but does not necessarily end with a HEA. There may be sex, there might not. If there is sex, it may or may not be with more than one character (a freedom not exhibited in MUF's often-confused-with cousin, paranormal romance). Unlike with paranormal romance, the conjugal couple is not as firmly established. The farther into the 2000s MUF books go, the more they're written with an edgy, action-oriented style. They feature an array of paranormal species, including but not limited to vampires, werewolves/shifters, and faeries.
Now on to Philip Palmer's Is Urban Fantasy Really All About Sex?
First I'd like to clarify that when Palmer discusses urban fantasy, he's not discussing urban fantasy in general, but rather modern urban fantasy, and in particular modern urban fantasy with vampires. It is his mistake that he generalizes modern-UF-with-vamps with UF-as-a-complete-genre. Also, in the interest of full disclosure, I have conflicted feelings regarding modern urban fantasy, and I am neither pro nor con.
*I consider Charlaine Harris contemporary fantasy, not urban, because as far as I know her series is set in the middle of a swamp, not a city. Feel free to correct me on this.