It is by Joe Haldeman but it came out back in the 70s. I have one of the original printings (which sadly has had the cover come loose but it was second hand to start). I wasn't aware that there was a sequel/re-issue although I had heard rumours of a sequel.

I'd say so. One of the issues I had with Handmaid's Tale was the total lack of real resistance to the regime. There are groups mentioned, and it is a totalitarian society to be sure, but the Handmaids aren't particularly brainwashed or indoctrinated. Just grabbed and abused. Given that, it seems like they'd be an obvious choice for assassins and saboteurs by rebels. They're right IN the houses of the most senior people in the theocracy and they are repeatedly raped by nutbars. Seems like a C-4 Burning Bed solution just waiting to be taken advantage of.

So yeah, for creepiness 1984 gets my vote. At least partly because of the 'otherworldliness' of it, which makes the suspension of disbelief easier to maintain. (Logistically it's an utter joke though).

Those are places where the thing falls down. "Getting rid of sexual need?" That's hardwired. You CAN'T get rid of it without some kind of chemical castration of the entire populace - and then how would your society continue?

Sadly, imagination excision probably would be possible with the right (or more correctly horribly wrong) upbringing. However the resultant 'citizen' wouldn't be good for very much.