It seems that our good friend Mr. Webster must be a Protestant, since this dictionary entry pointedly avoids defining the noun "sacramental." Roman Catholics use the word to refer to a religious rite or object that was not used or instituted by Jesus -- in other words, not a sacrament -- but which still has some sort of spiritual value. By Catholic reckoning, there are seven true sacraments, while the number of sacramentals is potentially infinite and varies according to time, region, and custom. Some of the more famous sacramentals include fasts, the rosary, the scapular, novenas, saints' medallions, holy water, holy cards, icons, prayers such as the Agnus Dei and the Ave Maria, house blessings, and other local or regional practices.
Most mainline Protestants, following Martin Luther, count only two true sacraments -- baptism and the Eucharist -- which they see as the only rites which Jesus directly institutes according to scripture. (Other Catholic sacraments, such as marriage, also appear in the Gospels, but Jesus himself is neither the celebrant nor the recipient, so Luther did not call them sacraments. Of course, if you believe certain silly conspiracy theories, you might be convinced that the wedding at Cana was Jesus' own, but that's a topic for another node.)
Some evangelical and charismatic denominations of Protestantism are severely allergic to the entire idea of sacraments, and will not refer to baptism or the Eucharist as such even if versions of those rites are part of their regular practice. These same denominations often have subsidiary practices that resemble Catholic sacramentals (sports rituals, non-scriptural prayers, teen retreats, saying grace, and so on), but they tend to use different vocabulary to describe it and to understand its purpose in a different way.
As recently as 1913, the Catholic Encyclopedia could credit sacramentals with driving away evil spirits and "occult powers," and with helping to deliver the soul from "sin and the penalties thereof." The somewhat more sober Catechism of the Catholic Church reads:
Sacramentals are sacred signs instituted by the Church. They prepare men to receive the fruit of the Sacraments and sanctify different circumstances of life. (#1677)
Evangelical Protestants tend to find this kind of language suspicious. They accuse Catholics of having a superstitious or magical perspective on Christianity -- making weird gestures, collecting kitsch, and muttering incantations to themselves in the hopes of coercing angels and saints to do them favours. No doubt there are plenty of Catholics who are like this, but it's worth understanding Catholic beliefs from a Catholic perspective, even if you don't agree with it yourself. As far as Catholics see it, sacramentals are meditative tools that permit people to contemplate God and draw closer to him, and which strengthen one's defenses against temptation and sin.
Some Protestant denominations, particularly Episcopalianism and Anglicanism, have more tolerance for sacramentals than the evangelical churches do, and incorporate versions of the rites and objects into their own worship.
Further Reading:
Catholic Encyclopedia article: http://www.newadvent.org/cathen/13292d.htm