Literature that blurs the distinctions between fact and fiction, prose and poetry, a short list with two items:

Nadja, by Andre Breton

Breton was the founder of the Surrealist group in paris, he coined the term, described the approach, and wrote it's first manifestoes. It's a tribute to Breton that the movement he stirred up in the ashes of Dada is now household knowledge in much of the world, while he himself remains relatively obscure. Likewise it is unfortunate because Breton was a brilliant writer, as his one and only true novel, Nadja, displays. The book is filled with illustrations, each plate in the series being one of the images that Breton assembled together to guide his plot. As such it is disconnected, raw, surreal, and at the same time moody, elegant, moving, and readable. The story follows Breton and a young homeless woman—who may or may not be a prostitute or any of the other things she seems—as they wander the streets of Paris and she ensorcells Breton with her madness. Throughout it is the strength of Breton's prose poetry that renders the story cohesive.

The Lover, by Marguerite Duras

Part memoir, part lament, part novel, and part poetry, Marguerite Duras' fictionalization of her teenage love affair with a wealthy Chinese heir in French Indo-China in the 20's has never failed to leave me sort of aching. It's a dull sort of an ache, the kind you feel when you watch someone beautiful on a sidewalk as you drive by on the bus and realize you will never know her. It's that kind of book, told in brief notes and snippets, revealing itself here and there like a clumsy fourteen year old virgin shrugging out of her dingy white shift.