I just finished reading Philip K. Dick's The Man in the High Tower. Briefly it is an alternate timeline wherein Germany and Japan win World War II. Nothing too exciting about that. Now how does Dick deal with it?
Dick's world has the two Axis powers dividing up the U.S. much as the Allied powers did with Germany. The Japanese are largely benevolent towards the occupied lands, however Germany continues along a path of extermination and police/military rule. The two Axis powers are also positioned in a sort of Cold War much like that between the U.S. and Soviet Union with proxy wars being fought in regions of Asia and South America. It seems that Dick doesn't want to stray too much from actual history here, but rather attempts to merely juxtapose the players.
One interesting facet of alternate histories for me is the possibility that moral problems are historically constructed. Winners write their own history. Portraying Nazi Germany as a "good" victor would be challenging and interesting version of events. Disturbing sure, but imagining a world where what was done was good is the kind of stretch I look for in this sort of book. Dick does a little of this, but ultimately the Nazis are still disfunctional and evil in his opinion.
One major theme in his book is the concept of "historicity" or that which separates the historical from the mundane. Think of the difference between a flag and a flag flown over the White House. Same object, but one gains a certain (though limited) amount of historicity. To illustrate this some of Dick's characters are forgers of historical artifacts. They have no qualms about flooding the antiques market with forgeries of Civil War revolvers and Mickey Mouse watches. Through the course of the book one particular forged item becomes a piece of history and must be contemplated as such. What is this ephemeral "historicity" is it real and what is it good for? Something to consider in the age of E-Bay where a wad of celebrity chewed bubble gum is worth bidding for.
Another theme is that of reality versus fiction. Dick presents us with a book within a book, The Grasshopper Lies Heavy. This book presents the characters with an alternate reality in which the Allies won the war. Although different from the way things actually turned out it does turn the eye of the character back towards the reader. This becomes even more convoluted when a few of the characters come to the conclusion that the events of The Grasshopper Lies Heavy are reality and they are living in a false world (Interestingly the notion that they are living in a false world makes historicity impossible).
What does it mean to live in a false world? It doesn't make sense to me to say that although everything that we see says one thing, what is actually going on is another. Why would anyone believe that the events of a book are more real than what they live every day? It seems as ephemeral as historicity. There are some clear parallels here to The Matrix movie, but in that case there is a real difference (however unlikely one is to find it). I might recommend the film Total Recall as an example of this inability to distinguish real from unreal (Not suprisingly Total Recall is based on Dick's own short story We Can Remember It For You Wholesale, which I have yet to read). This theme of living in a false world also harkens to Dick's own belief that we are actually living in ancient Rome and history has not progressed from there. It's a tough one to buy into.