WOODY ALLEN has finally become sexy. All right--maybe not exactly sexy. But certainly Allen's new film Annie Hallis our most appealing picture to date of the archetypal neurotic--now no longer pure nebbish--for whom life consists of only two categories: the horrible and the miserable. As Allen loses no time in pointing out, the miserable have, comparatively speaking, a lot to be grateful for--not the least of which is this funny, sad story of the romance of Alvy Singer (Allen) and equally neurotic Annie Hall (Diane Keaton, of course).

In Annie Hall, Allen combines the zaniness of the cut-and-paste technique he used in Love and Death with an integrated story line, as in Sleeper and Play It Again, Sam. The film works through a double set of flashbacks. Beginning with Allen monologuing about his view of life, it jumps back and forth between scenes of Singer's childhood and immaturity, and the depiction of his relationship with Annie. Annie Hall has its share of typical Woody Allen humor--of New York, psychoanalysis and sex jokes--but between laughs, it contains his most complete statement so far about what it means to be someone like Woody Allen.

There have always been two sides to the Allen persona. One is the neurotic self-pity, echoed in the perpetual plaint, "I would never belong to any club that has me for a member." The other is a neurotic self-indulgence, which expresses itself in fantasy. An element of fantasy has consistently pervaded Allen's films, beginning with the premise that svelte Diane Keaton could ever fall for such a patent loser. Often, the fantasy backfires; but in Annie Hall--as in real life, where Keaton and Allen are living together--fantasy has a way of coming true.

Not that the screen romance ends happily; the film is, on the contrary, an attempt to dissect its failure. But within the context of loss, Allen exhibits an enviable ability to do and say the things the rest of us only dream of. On the simplest level, that means cutting through the polite dishonesty that garbs social interchange. When Annie admits she's not busy either Friday or Saturday night, Allen asks her, "How come you're so popular? What have you got--the plague?" And when they go out for the first time, he requests a kiss smack in the middle of the evening to "get it over with."

There are moments in Annie Hall when whole world seems responsive to Allen`s deniand for total candor, if only through directorial manipulation. Early in the movie, Allen has his elementary school classmates reveal, in childish lisps, their future careers--from businessman to dope pusher. At another point, subtitles disclose what Annie and he are really thinking underneath their pretentious banter about aesthetics. Best of all is Allen's accosting of passersby on the street to ask them about his troubles. One contented couple straightfacedly admit that their content stems from the fact that they are silly, boring and vacuous.

Many of these fantasies--in fact, much of the film's humor--depends on the use of technical gimmickry. Allen's fascination with the split-screen, voice overs and the like is occasionally the most part, it serves to underline it's concern with the contrast between life as it is and life as it should be. This divide is exploited in one of the film's closing sequences, in which Allen watches two actors perform a scene similar to the one which has just taken place between Annie and him. The only difference is that in the play the lovers are not obliged to part.

All of which goes to show that the self-pity is still very much present. Allen has simply managed to turn it into highly successful entertainment. Annie Hall is, above all, an immensely funny film. Granted, it lacks both the sustained hilarity of Sleeper and the combination of farce and parody which characterized Love and Death. Then again, in Annie Hall, Allen doesn't need to go as far away in space as Russia, or as far away in time as several thousand years A.D. He can score points off the present without ever straying from his psychoanalyst's couch.

Aiding him is a large, name cast. Most memorable is Shelley Duvall as the rock reporter, prey to her own propaganda, who bores and beds Allen. Colleen Dewhurst also has a bit part as Annie's WASP mother, who exults in the ham she serves Allen. And then there is Keaton. She has never been much of an actress--perhaps the funniest scene she ever played was her dramatic revelation in Godfather II that she had aborted Al Pacino's baby. But in Annie Hall she is presentable enough as Allen's WASP counterpart; for once, she and Allen seem believably in love.

That believability is what distinguishes Annie Hall from many of Allen's other films. Alvy Singer and Annie Hall are real people--a bit more neurotic than most, perhaps, but still too familiar to be dismissed with a chuckle. Too many of the scenes in Annie Hall strike home--like the one where Allen, peeved at being late, refuses to enter a movie theater two minutes into the screening. Compulsive, yes--but in the case of a movie as good as Annie Hall, that sort of stubborn insistence on seeing the whole thing makes a great deal of sense.