This is the best collection of Schlegel's writings in English; (although more recently published, Philosophical Fragments has less material). It includes his often rhapsodically beautiful novel, Lucinde, which ignited a scandal--being based on his affair with the married Dorothea Veit (aunt of the composer Mendelssohn), whom he would later marry as Dorothea Schlegel--, his collections of fragments--most notably the Atheneum Fragments, in which Schlegel coined the term "Romantic poetry"--as well as the fascinating essay "On Incomprehensibility." Translator Peter Firchow provides an insightful and informative introduction.
Early German Romanticism is gaining renewed attention not only as a literary movement but as a philosophical one. (See for example Friedrich Schlegel and the Emergence of Romantic Philosophy.) Not only do his writings and aphorisms ("fragments") anticipate in their lightning flashes thinkers such as Emerson, Whitman, and Freud. He reads like an alternate history or future of deconstructionism and postmodernism, with uncanny similarities and salient divergences (he is no relativist). That is to say, he is strangely contemporary, which is why he is being rediscovered in the US today; (he and his literary brother have remained well-known in Germany).
"Romantic poetry is a progressive, universal poetry...Other kinds of poetry are finished and are now capable of being fully analyzed. The romantic kind of poetry is still in the state of becoming; that, in fact, is its real essence: that it should forever be becoming and never be perfected...The romantic kind of poetry is the only one that is more than a kind, that is, as it were, poetry itself: for in a certain sense all poetry is or should be romantic." --Atheneum Fragments, 116