Because of the fantasies the film has a surreal feel to it, but at the same time, it's also quite realistic, and feels at least partially auto-biographical. It's like a 'Rosebud' type of effect spread out over many situations, and it reminds us that the good and bad memories we carry around are always present, influencing our thinking and our emotions.
What we see is just how close to the surface events from his childhood long ago really are. Everything around him is a swirl, from the pressure his producer applies, to advice and commentary from everyone around him, to his lover (Sandra Milo) and wife (Anouk Aimée) both showing up. Through flashbacks to childhood, dreams, and fantasies, we see the inner mind of his main character, a director (Marcello Mastroianni) who struggles to figure out what to do for his next big film, even after sets have been built, and actors brought to the location. I'm usually not that big a fan of movies that describe the process of movie-making, or books that describe the process of writing for that matter, especially if it's about the difficulties and what amounts to 'writer's block', but in this case, director Federico Fellini is so masterful that it's impossible not to love 8 1/2. Beautiful, artistic, well-crafted, innovative, influential, heartfelt, and playful.