Travels in the Scriptorium, Paul Auster.
Very strange work. A bit too full of its own importance, but ultimately succeeds more than it fails, and accordingly offers some very interesting reflections on meta-fiction, the nature of reality, the nature of identity. The actual story is meager to the point of non-existence---strange man wakes up in a strange room and encounters some stories before time repeats. As well, the main analogy of this device wears a bit thin--that is, it's never really believable as more than an analogy. Additionally, too many of the little details come about through references to Auster's own life and work, making the whole thing overly parasitic on the past writings.
Still, what does work well is the process by which "Mr. Blank" interacts with the main story he's given, the way that's revised and reworked. It's a compelling piece in its own right, and the process of seeing it modified is very effective. As well, the ending to the book proper is powerful. However there remain ways this novel is sadly underperforming, and I'd only give it my partial advocacy.
Better than: Philip K. Dick's VALIS
Worse than: Jonathan Lethem's Chronic City
As well, shortly after I reread City of Glass by the same author. A much more impressive effort by the same author, offering a much greater punch to the questioning of identity and reality. Above all, the story was able to inhabit the strangeness of psychology much better--showing several people that were glaringly and fascinatingly unhinged, and then building to the quieter but equally major disintegration of the main character. It commits fully to a breaking down of reality and sanity, and does so with a lot of lines that are alternatively hilarious  and chilling. And I think the inclusion of the character Paul Auster within the story is just the right shade of bizarre, it sounds highly underwhelming in the abstract but actually plays well. The whole thing may stand as the perfect postmodern mystery: one is compelled into the role of detective without understanding even the name and role assigned, flails around trying to understand roles, never comes in sight of solving the mystery of securing anything, and in the end one also looses one's entire self.
 In particular, the scene where Auster is trying to identify a recently released convict as he gets off a train, so he can tail him and make sure he doesn't hurt his client. The man is watching the train, is sure for a bit he sees the guy getting off, then spots another one with similar features heading int the opposite direction. He dithers for a bit, decides to go after the second guy in punishment for intruding, then realizes that's absurd.
 The last two pages of the novel, in particular, are chilling, conveying a purely abstract and literary, but very real, type of horror.