Dancing in the Houses. Two Houses are having very different kinds of dances this weekend; both promise to be good. Sahara, probably one of the few local rock bands adventurous--and good--enough to try songs as complex as Marvin Gaye's "What's Goin' On?" will play Friday, May 17 at the Hotel Continental, 8:30 p.m., for $.99 which includes free drinks. Fiddling Eli Frank and the Rock Bottom String Band will call a square dance Saturday, May 18 at Dunster House, 8 p.m., $1.

James Taylor. Well, the sensitive folkie from Martha's Vineyard turned out to be another rich kid with rich kid's dreams and less and less to say musically as his albums wore on. It's too bad, because he sings well. I find it hard to listen to him now without recalling the National Lampoon's James Taylor parody: "Good-bye to New York City, where the street lights shine like strobes/Good-bye to Carolina where I left my frontal lobes." Sunday, May 19 at the Music Hall, $4.50--$6.50.

Folk Notes. Rosalie Sorrells plays through Sunday, May 19, at Passim. Call 492-7679 for information...Peter Johnson hosts another folk party with Bill Lyons, Jack White, and Eamon O'Dohery singing traditional ballads from the British Isles Saturday, May 18 at the Joy of Movement Center, 8 p.m., $2.

Folk Orgy. WHRB will cram as many live folk performers into its studios as it can for the station's traditional reading period folk orgy on Sunday, May 19, from noon to 8 p.m. Call 495-4828 for information.

Music Notes. The Persuasions bring some of the world's finest soul harmonizing to Paul's Mall through Sunday, May 19. Call 267-1300 for information...Houndog Taylor plays through Saturday, May 18 at The Performance Center, 8 and 10:30 p.m. each night. Ike and Tina Turner cancelled their scheduled show there; their loss is our gain.

Ry Cooder Those who missed the superb guitar playing and Depression-era balladeering of Ry Cooder at Sanders Theater get another chance to catch him Sunday, May 19 at The Performance Center, 8 and 10:30 p.m.