Doesn't seem like this really answered the Protestant's question. Catholics view grace not merely as unmerited favor, but as the very life of God. The sacraments impart grace by giving us access to the life of God. Grace isn't just God being nice to me, but God giving me Himself.
I would heartily endorse HTC's above post.
I would also add that although "God is not limited by the sacraments", the testimony of Scripture is that He has clearly intended these to be the normative means of Salvation.
The relationship we enter into with Him through the sacraments is much more than an airy fairy "spiritual how-do-you-do". The sacraments bind us to Him in covenant relationship which a mere "born-again" emotional sensation can never be sufficient to do.
The word "sacramentum" is the Latin translation of the Greek "mysterion" - both mean "oath". Throughout salvation history, the swearing of oaths and the offering of sacrifice have been essential elements of sealing a covenant relationship.
Numerous examples exist in Scripture where God binds himself to both unipartite and bipartite covenants with His people by Himself swearing oaths.
So although God is not limited by the sacraments, there is a certain sense in which it is quite correct to say that God chooses to bind Himself by them.
If this is the case then who are we to spurn them?