Obviously, this is a war drama. It's more complicated than a simple war adventure, though. Because O'Brien finds the truth of the Vietnam War too complex to express through a straightforward recounting of facts, he uses various postmodern tricks to do the job, such as a nonlinear narrative and a blatantly ambiguous relationship with the truth. Most importantly, O'Brien has a main character who is named after and shares some biographical details with himself (the author), but who's totally not the same as O'Brien, except that he kind of is. Huh?
He also uses magical realism to try to express the weirdo nature of life in Vietnam during the war. One example is when Tim tells the über-short true war story about the guy who unnecessarily jumped on a mine for his friends in "How to Tell a True War Story," and all the soldiers have a brief and hilarious conversation in the space between the mine going off and them actually becoming dead. It wouldn't be possible for that conversation to actually occur, but without it, Tim's story would lose its sense of both camaraderie and obscenity, and therefore cease to be true.
Another example is when Tim and Azar play the horrible prank on Bobby Jorgenson in "The Ghost Soldiers" and Tim's spirit lifts out of his body to become one with the war: "I was the land itself… I was the beast on their lips – I was Nam – the horror, the war" (The Ghost Soldiers.138). Obviously, it would be impossible for Tim's spirit to jump out of his body and fuse with the land and the war. Magical realism is used here to make Tim's descent into savagery more tangible – it makes the physical world resemble the emotional one.