Evocative and nostalgic tale, infused with religion and (homo)sexuality, and hence passion, betrayal and guilt.
The later part, about Charles and Celia and then Charles and Julia is more subtle, realistic and sad than the light frivolity of Oxford days.
Hollinghurst's "The Stranger's Child" has many echoes of this (http://www.goodreads.com/review/show/380807175).
It's five years since I last read this, but a few ideas that have come back to me by discussing it elsewhere:
People were strongly segregated by class and gender in those days. Not only were the schools (at least, the sort that Charles and Sebastian attended) single-sex, so were the colleges at university. The fact that people of their background were invariably packed off to boarding school from the age of 7 or 8, not returning until the holidays, created segregation from their parents as well. And of course there weren't many scholarship boys to broaden the social mix.
When I first read the book as a naive teenager, I thought the book was somewhat ambiguous about Charles and Sebastian's relationship. As an adult, I have no doubt that it was sexual, but that although Sebastian is gay, Charles is towards the straight end of bisexual: his attraction, nay obsession, is more with the Marchmain family than any individual member of it.
Naked male friends sunbathing may seem very gay nowadays, but was less so for Charles and Sebastian in Oxford. Nudism and "health and efficiency" were popular at the time, and there was nothing inherently gay about it. Kafka was a straight man of the period who was an enthusiast.
Also, as recently as the early 1980s there was a men-only nudist club on the banks of the river in central Oxford, (in)famously frequented by dons (professors) and clergy. It may still be there, though if so, it might be mixed sex, as the colleges themselves are. If you want to Google it, it was (is?) called Parsons' Pleasure!
Sebastian takes his teddy bear to Oxford and treats him as a living pet. Although his presence clearly signals a certain immaturity, I suspect that in Sebastian's mind it was at least as much a deliberate ploy to be seen as appealingly eccentric.
Apparently this element is based on John Betjeman taking his bear, Archibald Ormsby-Gore, to Oxford (http://en.wikipedia.org/wiki/Archibald_Ormsby-Gore).
To me, the Church is portrayed pretty negatively, yet some Catholics see it in a more positive light, and Waugh himself converted. I'm not sure whether that reflects a strength or a weakness in Waugh's writing.
Even so, how is this for biting satire, when Lady Marchmain is talking to Charles about her wealth and the perception that wealth can interfere with following Christ:
"It [being very rich] used to worry me, and I thought it wrong to have so many beautiful things when others had nothing. Now I realize that it is possible for the rich to sin by coveting the privileges of the poor. The poor have always been the favourites of God and his saints, but I believe that is is one of the special achievements of Grace to sanctify the whole of life, riches included."
(Book 1, Chapter V, p. 113)