Nonfiction, Fiction, and Some Hybrid of the Two: Isn't Everything?

Recently Farron posted (Based on a True Story: How Truthful Are We?) on his blog some ideas and questions about the acceptable amount of fiction in stories or films that are marketed as nonfiction or 'based on a true story'.  Then today, while once again searching for something to talk about from one of my literary magazine links, I found "PRISM TALKS TO NONFICTION CONTEST JUDGE AMBER DAWN ABOUT TRUTH, FORM, & THE POWER OF NONFICTION".  I didn't really know who Amber Dawn was, and I still don't really, other than simple facts like she wrote a novel entitled Sub Rosa -- I found the last two questions specifically interesting because they talk about nonfiction as a form.

Dawn says that, "nonfiction gives the reader permission to explore how they themselves are connected to the content." I think this is often true.  Farron's post about James Frey's novel illustrates this perfectly.  I remember hearing about people who said his book helped them overcome drug and alcohol addictions.  I have never read his book, so I'm not exactly sure how. But somehow they found a connection with his book, and many of them seemed to feel cheated when they found out it wasn't exactly true.  In Film 100, my professor declared the 'based on a true story' tag a cheap ploy, and I think I agree, but at the same time, sometimes I want to know this information.  For me it has nothing to do with the connection to the story or the art, in fact it often creates distance for me, because I can't stop wondering what is true and what's not.  I believe that the majority of people have the opposite reaction, but I often sympathize and empathize with characters I know to be fictional easier than I do with ones that are not (often even more than I do with actual people).  I'm not really sure why, but unless it's just because I am an awful or psychologically unstable person, I think/hope it is because I am a practitioner of the art of writing.  I don't know how anyone else writes, but I have never written a story that isn't at least partially based on me or my life.  Often these aspects have nothing to do with the plot.  Usually they involve insignificant details that help me flesh out a character; even in my drag queen story (although I do not want to be a drag queen and have never been a real part of that world) the main character was kind of me, in a way.  I did perform to Grease Lightning in an airband in elementary school and my group was disqualified for inappropriate language (even though the song had been approved beforehand), but more than this one fact of my life, this character and I share so much more.  Some of my stories are practically nonfiction, some might even be, and I guess as the writer it makes a bit of a difference to me, but does it to others?  Should I 'market' my nonfiction as such.  If I write a poem entirely based on reality (the only kind of poem I really know how to write) is that nonfiction? or does the fact that it is poetry void it from this possibility?  Does this classification matter to people as readers/viewers or as writers?