It takes place in a desert city (Mojave, I think) - there is nanotech, a fair amount of dystopia, genetic modification, and I think someone sprouts wings in the end...kind of cyberpunk-ish.
closed as not a real question by DVK-on-Ahch-To, John O, Jack B Nimble, NikolaiDante, Beofett Feb 20 '13 at 14:14
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If you take out the "someone sprouts wings in the end", I would say you are describing Prey by Michael Crichton. Published in 2002, it is described thusly in wikipedia:
The novel serves as a cautionary tale about developments in science and technology; in this case, nanotechnology, genetic engineering, and artificial intelligence.