Verbal irony is the art of saying something that you don't really mean. Note that it differs from dramatic irony in that the speaker is fully aware that what they are saying is not true - they are intentionally displaying irony, whereas in dramatic irony, it is often something said without a full understanding of the situation. Verbal irony is often the wittiest of the three ironies (there's also situational irony), because it is the quickest to reveal itself in a situation.

Verbal irony usually pops up in three distinct flavors:

  • Sarcasm - From ancient Greek meaning literally "to tear at the flesh", sarcasm is pretty much the bread and butter of our hyperironic short attention span world. To be sarcastic means to say something directly to or about someone or something when you really feel the opposite. (UPDATE: tdent wants me to clarify this, and I think he's got a point. Sarcasm in and of itself is merely a tone of voice indicating disdain and superiority. If you used a sarcastic tone to indicate the opposite of how you feel, then it is irony. However, it's rare to see verbal irony used directly at other people except in the case of sarcasm. End aside.) For example, if we were walking down the street and I fell down and you said, "Nice going, Baryshnikov!" you would be being sarcastic. Footprints' excellent treatise on The Art Of Insulting would be a fine primer for those of you wishing to master the art of sarcasm. Sarcasm itself can take on many tones, from the playful mocking above to harsh rebuttals ("Oh yeah, that's a great idea!") Also notice in the previous sentence I had to emphasize the word "great" to imply that in fact the idea was anything but. Inflection plays a big part in sarcasm - as well as other forms of verbal irony - and that sarcasm is often problematic when trying to convey in text. Often times, lazy writers will just add the phrase "Dick said sarcastically" or "Jane smirked" to convey attitude. In any case, be careful when trying out this new trick on your online friends, or they might not be that for much longer.
  • Hyperbole - While hyperbole in itself does not necessarily convey irony ("It was the biggest fish I ever saw!"), when someone uses a phrase that is intentionally untrue in order to convey an overstatement, that's verbal irony. When your teenybopper cousin recounts the time she accidentally bumped into Justin Timberlake and squeals, "I died right then and there!" she is using irony (or you are being haunted by the ghost of your teenybopper cousin.) A lot of times hyperbole relies on metaphors and common clich├Ęs to act as irony. When you say to your co-worker after a particularly boring meeting, "I swear, I'm gonna kill Mr. Johnson one of these days," your friend knows not to call the police because saying you intend "to kill someone" in today's time doesn't hold the same gravity as it might in the 16th century.
  • Understatement - As much as its symmetrical brother overstatement conveys conceit and self-awareness, understatement usually conveys humility and passivity. If you win the lottery, and a news reporter asks what you'll do with the money, and you say, "Well, I can finally pay off the credit cards," you are using understatement. Note that unlike overstatement, ironic understatement usually involves the truth - just a severely truncated one. Saying "you've felt better" after being rushed to the hospital with appenditicis is true, but is also a form of irony, because you probably haven't ever felt much worse in your life. A subform of understatement is the litotes, where we suggest something by negating its opposite. When I say that my friend "isn't the world's best speller", I'm saying they're actually pretty lousy at spelling.

The strangest thing about verbal irony is how well attuned we are to its presence. A lot of times it has to do with routine - the first time you hear someone say they're going to kill someone, maybe you tensed up a bit and gave them a funny look, but by now you're pretty much accustomed to such bombastic and utterly inert statements. In terms of literature and drama, verbal irony has come full-circle: at first, it was used to its own effect, with jokes like the "I've felt better" serving as means to its own humorous ends, but in today's postmodern society, such jokes only work when there is a completely unironic person around to misinterpret them.