I felt the book portrayed the situation very well, in general. I recommend reading the book version of "Girl, Interrupted" as it's far more explicit in many areas. There are slight differences in the book and the movie's treatment of Susanna Kaysen's story, but I think that was all for the better. The movie rounded and developed the characters, particularly Winona Ryder's and Angelina Jolie's, and the audience could easily see the extent of their respective conditions. It's obviously very difficult to show what a person is thinking in drama, as everything is dialogue based, so mental illness can come across very obscured. With this in mind I think the movie adapted the text amazingly well.
As for realism, well, talking about life in an institution it is very much realistic. In dealing with mental illness, having BPD myself (which the leading character in the movie was diagnosed with) I give it the thumbs up.
It was very realistic and dealt with the symptoms and mental/emotional/physical turmoil of the condition very well. Winona Ryder was great in the role, and Angelina Jolie's character was ever better... exactly like the book version and amazingly realistic.
All in all, a brilliant book... entertaining, realistic, touching and very well handled.