I really recommend the following books:

Hearing Voices: A Common Human Experience by John Watkins.
http://www.amazon.co.uk/Hearing-Voic.../dp/0855723904
Puts the experience of voice-hearing in a wider perspective, postulates that probably 10-25% of people hear voices at least once in their life, and discusses how voice-hearing experiences are interpreted in various cultures (including cultures where it is not considered a "disease").

Out of Her Mind: Women Writing on Madness by Rebecca Shannonhouse, ed. Pretty much what it says on the tin -- it's an edited collection of essays.

The Divided Self by R. D. Laing.
Laing was an anti-psychiatry psychiatrist in the 1960s/70s and sought alternative ways of treating psychosis. This book is his main statement about how he views schizophrenia/psychosis.

Most of the writings of psychoanalyst Julia Kristeva, especially one called Etrangers à nous-mêmes (Strangers to ourselves -- it's published in English too but I can't recall the exact English title). (I could list the motherlode of books about women, madness and psychoanalysis -- but I won't unless somebody really wants it!)




Fiction:

James Joyce's oeuvre, especially Ulysses -- because he probably was schizophrenic (and his daughter certainly was), not because he wrote on it. Avoid The Dubliners like the plague unless you can read the dialogue in a Dublin working-class accent.

I Know This Much is True by Wally Lamb. (fiction)
It's a long read, but good writing and an interesting story about a man and his twin brother, the latter of whom has paranoid schizophrenia.

The Double, by Fyodor Dostoevsky.
A lot of Dostoevsky is hallucinatory (as far as I read it, anyway), but this one especially so.

see also: House of Leaves by Mark Z. Danielewsky. This book royally confused me (look at the typesetting and you might see why), but it's also very hallucinatory and there is some suggestion that one or more of the characters have psychotic experiences. Lots of philosophical musings on sanity and reality, though, with a pretentious tendency to quote Pablo Neruda. This author has other books about psychosis/similar themes, but I haven't read them.

Coming through Slaughter by Michael Ondaatje. Main character is in an asylum for part of the book (plus I never miss a chance to plug Ondaatje).
There is a book I have in my "to-read pile" called Eden Express (Mark Vonnegut). It's a memoir -- has anybody read it?

Can I put a film here? (Newtus, I know you like films . . . ) It's called "de Gales hus" (House of Fools) and it's based on a book about a woman's stay on a psych ward that, as far as I know, has never been published in English. Trailer here: