If some lawn areas is a must, artistically places slabs may cut down on water use, as shown in this yard area from FreshDesignPedia. While some irrigation may be necessary, water falling on the slabs will runoff into areas between the slabs. The slabs may also limit evaporation by trapping water underneath, further reducing water required for irrigation.
This image from OutDoorGoods.info shows another use of slabs in conjunction with grass to create a livable outdoor space:
killyourlawn 
