How do you react to a sarcastic remark from a close friend?

Best response is a good long smile. Second best is no response. Worst thing is keeping in mind and then looking for a pay-back. I think these guys, rather folks, just want some attention and they try to gain it by negative means and hence the sarcasm. Just try and give them some positive attention and guess most of them will be cured of their sarcasm. (PS: I know its easier said than done).

I always try to respond in a somewhat casual and cool manner because i wouldn't want our relationship to become affected by certain small and inlogistic arguments. I have seen that even a small argument can sometimes result in a friendship being broken, so take my advice, always try to keep your head cool and think about the future.