'IN winter?" the frantic waiter repeats, dropping 40 francs into his apron pocket. "It's dead. But once this starts, it's completely crazy." He scurries through scores of small tables in the outdoor plaza, ready to serve more festivalgoers.The Avignon Theatre Festival is in full swing. It transforms a typical French town - centuries-old stone buildings, white lace-curtained windows, and narrow cobblestone streets - into the world's largest event of its kind. In 1948, Jean Vilar's mission to bring the joys and excitement of live theater to the public started with a few classics. Today, nearly 450 plays, musicals, cabaret acts, dance pieces, variety programs, solo and performance art works, children's shows, and circuses compete from early July to early August for hearts, minds, and francs. About 150,000 attend, from American backpackers, French families, and Japanese secretaries, to Swedish teachers, Italian honeymooners, and German choral societies. Voices of wildly-dressed hawkers extol their particular show's virtues as they press bright flyers into any willing hand. And flyers, posters, handbills, and even printed balloons blossom on every available wall space, lamp post, tree trunk, and door frame. It's Edinburgh's Arts Festival, Rio's Mardi Gras, Woodstock, and the Iowa State Fair all tossed together like a Provencal salad. "We're not looking for consensus," says festival director Alain Crombecque. In 1989, the festival, like other institutions, felt the impact of France's student restlessness. The "In," or established program, gave birth to the "Off," a movement to bring small, local, experimental works where the traditional was celebrated. "Today, it's a witness to the French theater's vitality, from the great national theater to the small regional ones - the goals are diversity and quality," says Mr. Crombecque. Centerpiece of the "In" banquet is fare presented at Palais des Papes, the 14th-century palace erected for Roman Catholic popes, converted each summer into a grand-scale outdoor amphitheater. True to its tradition, the approach is spectacular. Other spaces also host classics, literary adaptations, and specially conceived works chosen as much for scale as content, yielding sometimes wondrous, sometimes ponderous results. Most talked-about "In" production is Peter Brook's "The Tempest," as well-received here as it was in London. But while "In" can be staid, "Off" explodes with energy, as school auditoriums, cafes, church basements, and sleeping lofts become tiny theaters, housing as many as six different shows a day, starting at 11 a. m., and ending past midnight. On wooden benches, upholstered seats, or plastic folding chairs, audiences sample August Strindberg, Samuel Beckett, first-time playwrights, and Tennessee Williams. In a converted warehouse fitted with bleachers, typical Gallic emotionalism infects a production of WilliamsTwenty-Seven Wagons Full of Cotton," inflating the intensity level of this already-passionate play. While the casting is offbeat, (Baby Doll is handled by an actress nearing 30), its vivid message survives. "Romeo and Juliet" is interpreted in an unconventional manner. Annie Bizeau's version uses "Theatre du Figures," or "Shadow Theatre," employing one actress, an on-stage musician, and forms created by marionettes, maps, colored geometric shapes, or other actors that are projected onto a screen from behind. Director Alain LeCucq, standing near the card table box office, says that it extracts key points from Shakespeare, then embroiders them with the fantasy premise of tabletop figures coming to life. In Jean-Yves Picq's adaptation of "Le Journal d'Anne Frank," Anne-Berengere Pourchaire illuminates the Jewish child hidden from Nazis in World War II Amsterdam. Ms. Pourchaire's radiant performance balances sentiment and substance, infusing the well-known story with new spirit. And in another successful performance, Louise La Victoire portrays a woman discovering life's forces and limits, in Louise Roy and Louis Saia's "Duo Pour Voiz Seules," directed by Christian Bordeleau. If Avignon resembles a marketplace, Mr. Bordeleau explains that, in part, it is: "Producers and tour managers come here to 'shop' for things to present. State-subsidized national theaters, cultural centers, and regional playhouses are all required to book shows, and most come her to find suitable fare." Small acting companies spend their own money on rent, costumes, sets, and promotional materials, hoping to be hired. "It's a good place to show your talent," Bordeleau continues, as company members clear the stage, emptying the space for the next group. Like others, they rent it for two hours a day. And the selections are dizzying. "Dracula-Rock," with French dialogue and English Go-Go era songs, satirizes the Transylvanian legend, performed in a small boat. Actors cavort, warble, and grunt through "Dans le Jardin de Bosch," bringing to life the iconoclastic artist's outrageous paintings. In a converted cinema, Herve Lebeau's dance piece "Le Banc" chronicles a couple's meeting, courting, loving, and leaving, with inspired, fluid choreography and synchronous movement. After midnight, the Palace's sprawling square hosts itinerant musicians. As a Dutch violin-guitar duo performs in the Fellini-esque setting, actors from a just-ended production join many others sprawled or seated nearby, exhausted from a hectic day, and ready for more tomorrow.