If you haven't read any of the Viriconium books, first things first, you really must. Along with Gene Wolfe, M. John Harrison is one of those fantasy writers who would be lauded from the rooftops by the literary elite if only he didn't spend all of his time in the fantasy/sci-fi ghetto with the other untouchables. The beauty and precision of the language in the Viriconium books has to be read to be believed, and as well as that, they're just wonderfully weird - genuinely visionary - and pretentious in the best way possible. (The central concept for the books is that reality itself has become so old that it is beginning to fade and fray; Harrison described it with the immortal line: "The World is a muddled old woman...what seemed clear to her yesterday she remembers only by remaking it.")
Viriconium is a city, but the most important point to remember about it is that it is never the same city twice. Each short story and novel has it in a slightly different guise - the name even changes, being 'Vriko' and 'Uriconium' in some pieces - and though certain locations within it (the Plaza of Unrealized Time, The Stair, Alves, The High City, the Trois-Vertes, the Luitpold Cafe) remain the same, their locations shift from tale to tale. This is also true of the characters, who are different from book to book even though the same archetypes reappear (the melancholy swordsman, the vicious dwarf, the ancient man who may not be human, the fortune teller woman, the queen). This makes the Pastel City pretty much a perfect fit for an urban version of the Western Marches concept - ad hoc games arranged on an irregular basis with locations, adventures and characters worked out by the players together. You might even say that the Western Marches concept supports exactly the philosophy behind the stories themselves, being a way of playing D&D where nothing is ever quite the same from week to week but a common thread somehow holds everything together.
The trick is getting the tone right. Viriconium manifestly isn't typical high fantasy fare. Indeed, to make it such is to fall foul of the very problem that Harrison himself indicates when he remarks that:
[The] commercial fantasy that has replaced them [i.e. Tolkien, Moorcock and the other "great modern fantasies"] is often based on a mistaken attempt to literalise someone else’s metaphor, or realise someone else’s rhetorical imagery. For instance, the moment you begin to ask (or rather to answer) questions like, “Yes, but what did Sauron look like?”; or, “Just how might an Orc regiment organise itself?”; the moment you concern yourself with the economic geography of pseudo-feudal societies, with the real way to use swords, with the politics of courts, you have diluted the poetic power of Tolkien’s images. You have brought them under control. You have tamed, colonised and put your own cultural mark on them.It was this very tendency that motivated him to try to write something markedly different (indeed, opposite).
No, a Viriconium-based role playing setting would have to be something else entirely from the D&D worlds we know and love. For starters, the players would have to buy into the concept itself; but they would also have to resist the masturbatory kind of "narrativism" that is too often the result of trying to run a "storytelling game". (The Viriconium series tries to do something radically different with fantasy, but it is still at base about quests, fights with swords, and slaying monsters.) For another thing, they would have to be the kind of people who get a kick out of not quite ever knowing what is going on and moreover see that as the whole point, and that isn't to everyone's taste. Like me, they'd also probably have to be pretty pretentious.
I'm going to give the matter some more thought and see if I can better expand on what I think a Viriconium D&D campaign would be like to actually play.