The dystopia she uses to attack collectivism in this book is, as another reviewer said, a straw-man. However, that is precisely what dystopias are: inflated versions of a worldview the author opposes. The society portrayed in this book is neither socialism nor communism, but an absolute anti-individualism. Similar, perhaps, to an ant colony. This setting was chosen to provide a strong foil against her pro-individualistic stance - and it's quite effective.
Regardless of how somebody feels about Ayn Rand's philosophy, this is a well written book. The use of descriptive prose is elegant and aesthetic, and the way she chooses the protagonist's vocabulary is reflective of the society in which he dwells. The evolution of the characters' thoughts are passably realistic, though everything is more of a thinly-veiled symbol of the Objectivist philosophy. There's also a rather beautifully written love story in it.
Given that Ayn Rand has a tendency to draw things out and over-explain, this quick read is the first time I ever actually made it through a full work of hers. That helps make it a lot more effective, so I would recommend this to anyone who wants to read this author.