Spoken Sanskrit

Was ever Sanskrit used as a layperson's day-to-day language? In Vedic times, is it the case that there wasn't much difference between Vedic Sanskrit and what people spoke? When did Sanskrit and vernacular divide, if ever?

Difficult to answer. We tend, first of all, to identify Sanskrit as accurately described and prescribed in grammar works. Obviously, a commonly spoken language is less static and regular than this. The earliest prose Sanskrit we know, that of the Brahmanas and Upanisads, must be to at least some extent a literary version of spoken language. The favour given to the vernacular in Buddhism and Jainism is reported as quite old.

To some extent unknown to me, spoken Sanskrit must have been kept alive in Brahmanical circles. An hypothesis is that at the latest by the 8th or 9th century it definitely had disappeared as a widely used native tongue. Facts that point to this direction are the employment of regional languages in dramas, with Sanskrit limited to higher class characters; the prohibition for women and low castes to hear Vedic recitation and even Smṛtis. Obviously, if Sanskrit was reserved to the higher layers of society, the majority did not use it.

The modern linguistic forma mentis struggles with the idea of an highly inflectional language such as Sanskrit being mother tongue. Children certainly struggle with declensions and conjugations, and particularly so if the environment is not linguistically "pure" as most often the case. But perhaps such a limitation is perceived greater than it is due to our addiction to modern languages.

The historical continuity of Sanskrit, on the other hand, is certainly there as a language of rituals and prayers.

As for the modern day spoken Sanskrit, sometimes broadcasted and taught for political agendas, as far as I have seen it is a oversimplification of literary Sanskrit.