that's precisely right, and Matt, perhaps you ought to consider a course in logic. The definition of sovereign according to the American Heritage Dictionary is: one that exercises supreme power, permanent authority, especially in a nation or other governmental unit. Now, this definition would naturally allow an entity to NOT be sovereign in several ways. For example, an entity might not be sovereign because it is restricted by a ruler, restricted by a theocracy, restricted by a monarchy, or restricted by the powers of a broad representative body/Congress. Thus, there are a mulitude of ways in which an entity is not sovereign. Being restricted by the broader powers of a Democratic form of government is just one of them, and it is this definition that applies to our present discussion.
States are not completely sovereign because the federal government restricts them in a multitude of ways---through the Commerce Clause, through the taxing power, etc. My earlier statement would only be circular if there was only one way that an entity could not be sovereign---which just isn't the case. Nevertheless onto more important issues.
The 10th Amendment only states that the powers not delegated to the United States by the Constitution are reserved to the States. Therefore, states basically get what the United States Supreme Court and Congress deem do not belong to the federal government. Of course, there are traditional areas that have always been left to the states such as matters of divorce, the family, safety/crime, and healthcare issues. But, the Federal government through the Commerce Clause has managed to intrude into those areas as well. Example: The Supreme Court has invalidated many state safety laws (an area traditionally afforded to the states but not longer because of its impact on intestate commerce). In short, it's not very difficult for Congress to encroach on states rights so long as it can find a sufficient nexus between the interest at play and its effect on interstate commerce----which is very easy to do. So to say that states are sovereign in theory is correct, but in actuality it is just simply not the case.