I just finished a novel by an old favorite (someone I edited much earlier in my career, who went on to a very nice level of success), and I was reminded of a few battles I'd had back in those days.
In this particular book -- one of her last before she passed away -- she had no chapters. The book just began on page one and continued through the end, with no subdivision into parts or chapters. Breaks in the narrative were signaled by a couple of lines of blank space (not uncommon, though some publishers use three centered asterisks). And I remembered the long debates we had about exactly this practice. In her earlier books, I really did sort of twist her arm into dividing the book up into chapters. She did so, but halfheartedly. Somehow she always managed to make her first ten chapters about 2 or 3 pages each, but after that each chapter got longer and longer, until the last few chapters were fifty or sixty pages each. By the time she developed a following, she had earned the right to do whatever she wanted, so she said "To hell with chapters" -- and her fans kept buying and reading her books without a word of complaint.
When I finished this particular book and closed it for the last time, I had a thought that the structure she had used was probably exactly that of the ancient storytellers, who gathered people around a campfire, talked until they were hoarse, and then picked up the next day where they'd left off. Which, in a way, makes chapter divisions into an artificial convention put onto the book by paper. The book I'm speaking of is a historical novel that spans several hundred years, so the lack of chapters made a curious sense to me, giving the book an organic flow that reflects the organic flow of history. So now, several decades later, I think I can admit that she was right all along.
HOWEVER! I still like parts and chapters, and I doubt that will ever change. This is more than just a personal preference; there is some method to my thinking. So, herewith some random thoughts on chapters.
1. Anyone who's ever worked with me knows of my strong belief that a mystery is nothing without a very strong structure. I loathe sloppiness. For me, well-thought-out chapters are usually the mark of a steel edifice undergirding the book. Some may suggest that chapters imply that an author has written from outline; and I have no problem at all with this.
2. I do think that parts and chapters allow for a great deal of narrative creativity, permitting the writer to experiment with different voices, time frames, perspectives, and so forth. In those instances, the part/chapter structure serves as a welcome aid to readers, helping to orient them to a new way of reading or thinking about the book. And I don't think it's such a bad thing to help readers out, especially in genre fiction, where book buyers often read for escape and may not want to work too hard.
3. Chapters can be a superb suspense device. I admit that I am a sucker for cliffhanger chapter endings, or end-of-chapter twists. To me this can be evidence of a diabolic authorial mind at work, and I love diabolical writers. Such an approach is very readerly, demonstrating that the writer has written with the reader in mind, with a goal of delivering generous doses of mystery conventions throughout the book.
4. There is always controversy over chapter length. Some writers feel that a chapter isn't good and solid unless it goes on for 25 pages. Others like shorter, punchier chapters. Of course, it depends on the work, but I admit to liking short chapters. To me, these seem very solicitous of readers who may not have the energy to get through 25 pages, who read in short spurts on the bus or subway, or elsewhere. I don't think there's a person alive who feels quite comfortable in closing a book for the evening in mid-chapter. Also, I think that short chapters can really add to a book's sense of suspense and pacing. I believe, too, that short chapters can at least partially explain the success of Mary Higgins Clark and James Patterson.
5. Call me crazy (and some have), but I like a round number of chapters: 10, 20, 25, 30, 40, 50, 75, etc. Often I get manuscripts that end on, say, Chapter 49 or Chapter 78. There is nothing inherently wrong with this, of course; perhaps it's my OCD that wonders why the writer couldn't have stretched 49 into 50, or 78 into 80. Will this make a difference in whether I acquire a book or not? No, but you should definitely expect that in my revision notes I'll ask you to even out the chapter count.