How was it that O'Brien could read Winston's mind so well in 1984? Is it possible the Party had a mind reading device?
No, there are no mind-reading devices in 1984. There are, however a few really good reasons why O'Brien can 'read' Winston so well.
O'Brien and the State have been observing Winston for years through the viewscreens;
Don't worry, Winston; you are in my keeping. For seven years I have watched over you. Now the turning-point has come. I shall save you, I shall make you perfect.' He was not sure whether it was O'Brien's voice; but it was the same voice that had said to him, 'We shall meet in the place where there is no darkness,' in that other dream, seven years ago.
O'Brien has enormous experience interrogating and intimidating people;
There was no idea that he had ever had, or could have, that O'Brien had not long ago known, examined, and rejected. His mind CONTAINED Winston's mind. But in that case how could it be true that O'Brien was mad? It must be he, Winston, who was mad. O'Brien halted and looked down at him. His voice had grown stern again.
Julia betrayed him and revealed all his secrets, including his fear of rats;
She betrayed you, Winston. Immediately--unreservedly. I have seldom seen anyone come over to us so promptly. You would hardly recognize her if you saw her. All her rebelliousness, her deceit, her folly, her dirty-mindedness--everything has been burned out of her. It was a perfect conversion, a textbook case.
O'Brien has read his diary
'Do you remember,' he went on, 'writing in your diary, "Freedom is the freedom to say that two plus two make four"?' 'Yes,' said Winston. O'Brien held up his left hand, its back towards Winston, with the thumb hidden and the four fingers extended. 'How many fingers am I holding up, Winston?' 'Four.' 'And if the party says that it is not four but five--then how many?' 'Four.' The word ended in a gasp of pain.
Winston's rebellion is truly pathetic. He's been led by the nose at every stage;
You have read THE BOOK, Goldstein's book, or parts of it, at least. Did it tell you anything that you did not know already?' 'You have read it?' said Winston. 'I wrote it. That is to say, I collaborated in writing it. No book is produced individually, as you know.'
I have to disagree and say that yes without question some sort of active mind reading device had to have been employed. There is also a good reason to believe that the party also had the ability to affect the dreams of a person. All of the arguments made might have allowed O'brian to guess some of Wimstons thoughts but not all of them with perfect precision as Winston thought them. It is the ability to read his thoughts that ultimately breaks Winston. He no longer can hide in his own mind.