May 16, 2001 | Once upon a time, some impudent rascals at DreamWorks Pictures had a nifty idea: They would produce a tongue-in-cheeky animated fairy tale. Their movie would spoof the conventions of beloved bedtime stories and - perhaps more important - shrewdly satirize classic cartoon creatures from The Magic Kingdom (a.k.a. Walt Disney Productions). Their hero would be a monstrous ogre; their villain, a haughty (and height-challenged) prince. The heroine of the piece? A fair damsel with a most unladylike knack for butt-kicking. And the hero's best friend would be a real jackass. Really: A talking donkey who doesn't know when, or maybe even how, to shut up.

Lo and behold, the dreamers at DreamWorks transformed their flights of fancy into state-of-the-art computerized animation. Better still, they also made an extremely funny movie. Shrek, the product of their prodigious enterprise, will keep audiences of all ages laughing happily, if not ever after, than at least throughout all of the summer, and probably well into next fall.

The title character is a grouchy green hulk who lives in the depths of a dank swamp. Shrek speaks - and, occasionally, roars - with the ragged burr of a Scotsman who'd prefer to be left alone, and practices the kind of personal hygiene that, under normal circumstances, would repulse most visitors. (He enjoys mud baths, and makes candles from his own earwax.) But when the local tyrant, Lord Farquaad, launches a pogrom against the fairy-tale creatures in his domain, Shrek suddenly finds his swampy environs overrun by such refugees as The Three Blind Mice, The Three Little Pigs, The Big Bad Wolf - and even Snow White, along with all seven of her dwarfs.

There's also a donkey, aptly named Donkey. He talks. And talks. And then talks some more. He's nothing if not eager to please, and ingratiating to a fault: In return for a place to sleep, he offers to fix a hearty breakfast of waffles for Shrek and himself. It's enough to drive an ogre to distraction - and, beyond that, to a dangerous quest.

Longing to be rid of the unwelcome squatters, Shrek strikes a deal with Lord Farquaad: If his lordship will allow the fairy-tale creatures to return home, Shrek will retrieve Fiona, the beautiful maiden Farquaad desperately desires, from the clutches of a dragon in a far-off castle. Not surprisingly, Farquaad - who, truth to tell, is a bit too short to do much maiden-retrieving or dragon-smacking on his own - readily agrees to the deal. Donkey, of course, volunteers to go along for the ride, regardless of whether Shrek actually wants his dubious assistance and chattering companionship.

Such is the set-up for a comic odyssey that merrily riffs on a hundred or so years' worth of fables, fairy tales and animated features. Skewering Mother Goose with enough exuberance to make the Brothers Grimm laugh out loud, the makers of Shrek shatter a few myths about magic mirrors, fire a couple of jabs at ferocious dragons and reveal some ugly truths about beautiful princesses. And when they're not shooting at these and other sitting ducks, they elevate their sights and take aim at more contemporary targets. Television game shows, Matrix-style fight scenes and that wonderland known as Disney World figure into the mix, as co-directors Andrew Adamson and Vicky Jenson puckishly juggle anachronisms with an anything-goes élan that should make the makers of A Knight's Tale turn Shreky green with envy.

In terms of intricate detail, gracefully flowing movement and utterly persuasive three-dimensionality, the computerized imagery in Shrek far surpasses anything previously seen in a feature-length production. But the beauty part is, even if the movie had been hand-drawn and animated in the pedestrian style of a '60s TV cartoon show, it likely would be just as amusing.

The script - credited to Ted Elliott, Terry Rossio, Joe Stillman and Roger S.H. Schulman, and based on a children's book by William Steig -- works wonderfully as both razor-sharp parody and old-fashioned, straight-ahead adventure. Naturally, Shrek can't help falling in love with the lovely Fiona. Just as naturally, Fiona slowly recognizes the sensitive soul buried deep - very, very deep - beneath the green ogre's gruff exterior. But when it comes time for happily-ever-aftering, Shrek takes a slyly subversive approach to proposing morals about true natures, false impressions and skin-deep beauty.

The characters are perfectly cast with stellar vocal talents. Mike Myers - who, you may recall, played an even surlier Scottish-accented fellow in the last "Austin Powers" movie - hits all of the right notes, light and dark, enabling Shrek to be likeable in spite of himself. John Lithgow brings silken arrogance and iron-willed petulance to his effective voicing of Lord Farquaad. As Fiona, Cameron Diaz winningly conveys more than sufficient spunk and sensitivity for the movie's revisionist take on the archetypical fairy-tale princess. And Eddie Murphy proves here, as he did in Mulan, that his sassy and brassy motor-mouth jive-talking qualifies as a special effect all by itself. Does Donkey steal the movie? You bet your... well, never mind, see and hear for yourself.