The makers of "Penelope" pull off a contemporary fairy tale without being a) a cartoon or b) childish or c) cloying or d) sophomoric. The movie, ably directed by newcomer Mark Palansky, is smart about its characters and the not-quite-real world they inhabit. Christina Ricci, who stars as a cursed princess, and James McAvoy, who is her rumpled, nearly penniless Prince Charming, play the characters in Leslie Caveny's screenplay with straightforward earnestness. The result is an entertaining comedy for young girls and older girls who still like a good romantic fable.

It's a twist on "Beauty and the Beast," the twist being that this time the young woman is the beast. Many years ago, a young and fecund male in the wealthy Wilhern family shamed a young servant girl and failed to do right by her. The girl's mother, a witch, gave the family a curse that its next girl baby would be born with a pig's snout that can only be cured when one of her own kind loves her.

As luck with have it, the family went through generations of male children before Penelope (Ricci) was born. Actually Penelope is pretty cute except for the snout. She is hardly ugly enough to have blue-blooded suitors flinging themselves through glass windows to escape the family mansion. But then, blue bloods are so finicky.

When Penelope was a baby, gutter journalists such as Lemmon (Peter Dinklage) so hounded the family in pursuit of the truth behind the rumors of deformity that her parents, Jessica (Catherine O'Hara) and Franklin (Richard E. Grant), faked her death. So Penelope grew up in regal isolation in an attic bedroom filled with wonderful toys, a swing and false scenery. Now when the family seeks suitors for Penelope of "her own kind," all must sign agreements not to disclose what they see.

However, one suitor, the insufferable Edward Vanderman (Simon Woods), escapes before signing the agreement. The police lock him up for lunatic babbling about a pig-faced woman, but Lemmon picks up the scent. Lemmon, determined to get his scoop, and Edward, desperate to rehabilitate his reputation as mentally unbalanced, hire a "down-and-out blue blood," Max (McAvoy), to pose as a prospective suitor and take a photograph of Penelope for Page One.

Max is rather charmed by Penelope, though, so he never delivers that shot. Yet he too, for reasons the movie coyly reveals later, will not ask for her hand. Fed up with a life of rejection, Penelope flees her home and, with a scarf disguising her deformity, is determined to live in the outside world.

She makes friends with swaggering Annie (Reese Witherspoon, one of the film's producers) and things are going just fine until her parents track her down. When Penelope refuses to return to her old life and decides to go public with her curse, the movie cleverly turns into a satiric take on celebrity culture.

Ricci, playing against type with refreshing results, treats Penelope's voyage of discovery without any winks or nods to the audience. Her Penelope is a sweet-natured, surprisingly well-adjusted woman, who yearns for love. Her real problem is not the snout but overprotective parents.

McAvoy's Max labors under a curse, albeit a self-imposed one: He has drifted away from his musical talents due to an addiction to gambling. He thus is Penelope's soul mate, a person looking to overcome a poor self-image so that he might reclaim his life.

The rest of the cast deliver fine comic performances, especially O'Hara and Grant as the wrong-headed parents, Woods as the clueless snob and Dinklage as the tough-on-the-outside reporter.

Palansky shot the film in London, but brought in French cinematographer Michel Amathieu, New Zealand production designer Amanda McArthur and British costume designer Jill Taylor to turn the city into a fairytale world. Interiors are bright and colorful, everything is freshly scrubbed and the skyline a romantic mix of many places. There is timelessness to the city, where things are modern yet journalists write on manual typewriters and the Wilherns' telephones have rotary dials.