I just love this concept. Having grown up in Belfast, where the tribal boundaries are sometimes invisible but always must be respected; also having seen Berlin before and after the fall of the Wall; and having got to know both sides of Nicosia more recently (not to mention other places with less formal but similar issues), I can see the total fascination of these invisible fractures through the urban landscape. (I have never been to Tighina/Bendery, but it is another interesting if lesser-known example which actually fits the geography of the novel rather well.)
Miéville takes this setting and explores it through the eyes of police detective Tyador Borlú, investigating a murder which appears to have transgressed the boundaries between Besźel and Ul Qoma. This is a brilliant idea, as the necessary infodumps come through the tired musings of the jaded investigator trying to get at the truth in a bizarre world. But nothing is as it seems; and Borlú ends up confronting pretty much every one of the uncomfortable truths that keep the two cities together and apart in the process of solving the crime.
The book doesn't have a totally satisfactory resolution. Eventually Borlú delves into the factors which connect and divide Besźel and Ul Qoma, and I was hoping for a slightly more substantial explanation than we get. But it still went at least half way towards meeting my expectations, and is basically a very good read. The City & The City is currently top of my BSFA ballot; let's see if Ursula Le Guin's Lavinia can impress me more.