Gary R. Wood replies: I like to distinguish finishes by their solvents and resins. Alcohol solvent dissolves shellac gum resin and so shellac is never alcohol proof even when completely cured. Shellac is, however, a flexible and protective film that can be repaired by careful application of more shellac.
Modern varnishes may use alkyd resins and often have mineral spirits as their vehicle or thinner. Once the thinner is evaporated, there is a durable film that is resistant to most liquids, heat and scratching.
Urethane is similar to varnish in that its thinner is often mineral spirits and one or more synthetic resins. It is durable but is often plastic looking.
Modern lacquer is made in many formulations and with a combination of strong solvents. Like shellac, lacquer has the ability to burn in, that is, one coat dissolves into the previous coat, giving exceptional depth to the overall finish.
Traditional shellacs and lacquers have long been used for their clarity, decorative appeal and versatility. Varnish and urethane are good choices when durability is the key factor. These days, almost all the finishes, even shellac, can have formulations using water as their vehicle rather than solvents. I generally favor solvent based finishes for high end work and water base for less demanding applications such as cabinet interiors.