I would never review an erotic PNR (paranormal romance) novel, although I have indulged in reviewing some Harlequin-books. PNR novels are 99,9% far too corny for my sensible taste, with macho men who turns into marshmallow when they meet their feminine counterpart. ;-/ And Harlequin-books resembles me of Days of our lives, or that kind of boring crap, anyway.
And I never review really really boring crime novels, like Agatha Christies Hercule Poirot-books (haven´t read any Miss Marple, but Im afraid they´re pretty much the same content).
I think it's only fair to stay within your perceived boundaries as you could be tempted to criticise something which may just be a good example of a genre you're not keen on. It's always good to be able to 'taste' the book by seeing the first chapter or two as well. Finally, there's also the time factor to think about: I don't have much time available, and I love reading, so I don't want to use that valuable reading time on something which will just disappoint me...
Luckily I write for a site that focuses on female fiction, and female only. Sometimes I feature and review non-fiction and YA, providing it's female-focused.
It's mainly a chick-lit website (it's pink and called Trashionista!) but you'd be surprised how many emails I get from authors of sci-fi and other totally unrelated genres, asking if I want to review their books. Spam much? Heh.
I can tell you how I would and have. If it's an e-book request, I tell them that per my review policies, I do not review ebooks as I find them difficult to read and I appreciate their offer.
For books I know I wouldn't read regardless of free or not, I tell them that although I am sure that the book is great, I don't normally read that particular genre and that I do not believe I could give them a fair review and feel that it would be best passed to another reviewer who might enjoy that particular subject.
Also, if they email me and don't address me by name and it looks like their email is a copy/cut/paste email and it's not a book I would read and review, I just delete it and move on.