Was this based on a book?

Yes, the film based on the book FUEHRER EX (US title; German original was titled DIE ABRECHNUNG), the autobiography of Ingo HASSELBACH, who also worked on the script. The German DVD has extensive behind-the-scenes footage of him providing advice during the shot (for instance about his time in solidary confinement, what he felt and how he reacted) or commenting on locations (the street where he lived in Eastern Berlin). The book's focus however is on his time as neo-Nazi and his drop out of the scene. The German DVD has also excerpts from a early 1990ies TV documentary about him.

Yes but at times you wouldn't think so—in fact I don't think I've *ever* seen a movie that was more dissimilar to the book it was allegedly based on.

Having said that it's not a bad film by any means, just keep in mind it's well-summarized by the main review at its site here, i.e. it's about two friends and how they are affected by changing sociopolitical conditions in the former East Germany, and most definitely *not* about how a hardened ex-neo-Nazi comes to turning his back on his set of beliefs/lifestyle/etc.