Though it's choked with dead bodies and disappointments, The Royal Tenenbaums comes before you with a smile. It wants you to know it's a whimsical film: the kind of story you might check out of the young-adult section of the library, where the books have funny line drawings at the chapter heads. An unseen narrator speaks, in tones that remind you of afternoons spent tucked into an armchair, and the characters pop up on the screen, as if called from the pages of some latter-day E.B. White. Here is the family of eccentrics; and here is their big, comfortable house–limestone and turrets outside, dark wood and burgundy walls within–set on a cozy New York cul-de-sac. Everything's a little too charming: from the pet mice that skitter through the frames to the straight-on, photo-album views of the characters, who are shown complete with captions. At this early point, of course, you haven't begun counting the casualties.

Even within the opening moments, though, you might guess that the pink icing has been layered onto a brick. "Is it our fault?" ask three children, when their father informs them he's moving out. No, replies Royal Tenenbaum (Gene Hackman), speaking from the very far end of a dining-room table. Then, with a candor that's as absurd as the table's utter bareness, he adds, "Of course, your mother and I made some sacrifices to have you."

What could fill such a paternal void? Etheline Tenenbaum (Anjelica Huston) pumps it full of ambition. Her children must all become geniuses; and so, with a briskness that's well summed up by the pencil she keeps stuck in her hair, she programs the kids until they're famous for their success. The effect, again, is only too charming: In quick succession, you see little Chas standing at his desk, running a business empire; little Margot typing away at award-winning plays; little Richie stringing his tennis racket, on the way to the pros at the age of 8. You may smile to see these half-size people behaving like grown-ups; but in that corner of your mind reserved for unease, you may also wonder whose fantasies they're living out. Their father (that good-for-nothing) chases after big money, bright lights and the sporting life; and so the children turn themselves into whatever he desires in the big city of Gotham.

Not that anyone in the movie uses that name; but what else can you call this place, where a man can live on credit at the Lindbergh Palace Hotel? The Royal Tenenbaums is set in the romantically dowdy city of John O'Hara's stories and Charles Foster Kane's side-street love nest: a New York that, despite being imaginary, has drawn so many millions of real people. It's here that the movie actually begins, twenty-two years after the parents' separation, when a broke and aging Royal is evicted from the hotel, and the child prodigies come face to face with the futilities of impending middle age.

Through a combination of lies and sexual longings that I needn't detail, everyone moves back into the old family house, which still flies a ragged pennant emblazoned with a T. Royal apparently means to reclaim this flagship property, and Etheline with it–goals that can best be achieved, he thinks, if he claims to be dying. Never mind the illogic. (It will reach its height later, in the woozy report of another character: "I wrote a suicide note as soon as I regained consciousness.") The main point is, Royal takes everyone on a visit to the cemetery, during which sequence each of his offspring unearths a buried injury. We're reminded in quick succession of how Chas (Ben Stiller) wound up with a BB pellet lodged in his flesh, as a permanent grievance against Royal; how Margot (Gwyneth Paltrow) lost a finger of her right hand, in yet another incident that can be blamed on the father; how Richie (Luke Wilson) played his final, disastrous tennis match, on an afternoon when disillusionment led him to make seventy-two unforced errors. Unlike his siblings, Richie hasn't bled yet; but he knows how treacherous, how funereal, love can be. It's a lesson he shares with Etheline's new suitor, Henry Sherman (Danny Glover), who by this point in the film has proposed marriage and fallen into an open grave.

I shouldn't make too much of these elements that are literally underground (the film doesn't); but there they are, underlying the whimsy, which meanwhile keeps your eyes busy with surface effects. They're clever enough, these effects, such as the reduction of the characters' wardrobes to a single outfit apiece. Richie still wears the sunglasses, headband and long hair of a late-seventies tennis pro. Margot, with her kohl-rimmed eyes, mink coat and little striped dress, comes across like an 11-year-old playing dress-up, or a grown woman pretending to be a little girl. As for Royal, he's a lounge lizard of the tweed-jacket era, trying to dignify himself with a pair of Henry Kissinger's eyeglasses–which is to say he's a disbarred attorney and looks it. And all the while, as you're occupied with these little conceits, the film's geologic strata are shifting into place.

The Royal Tenenbaums is the work of director Wes Anderson, who wrote the screenplay with his regular collaborator, Owen Wilson. Since their previous picture was the utterly brilliant Rushmore, expectations have run high for the Tenenbaums, and disappointments have been voiced. I, too, felt let down at first. The fantasy version of New York City seemed arch to me. (Taxis are always instantly available, and invariably bear the logo of the Gypsy Cab Co. The only place to exercise is the 375th Street Y.) I also wondered whether some of the characters, such as the perpetually pissed-off Chas, were absolutely necessary to the story, and whether the redemption of Royal wasn't too much of a foregone conclusion. The second viewing hasn't moved me to play a mug's game and compare The Royal Tenenbaums to Rushmore; but it has convinced me that a strong imagination is at work in every part of the picture.

The talent is easiest to see in the performances that Anderson has elicited, beginning of course with Gene Hackman's Royal. He's a man without an internal censor–whatever pops into his mind comes out of his mouth–who nevertheless tries to con people. A hopeless ambition; yet astonishingly, he has moments of success, which Hackman somehow makes plausible and transparent, sleazy and endearing, in a single gesture. It's a big performance by a big actor; and it's matched, paradoxically, by Gwyneth Paltrow's infinitesimal gestures as Margot. In one of her best scenes, where she's reunited with Richie after many years' absence, she almost smiles. Then she doesn't. That's it; and it's enough to make Margot into a booming echo chamber of hurts and longings.

Just as memorable are Luke Wilson, whose Richie tries so hard to be sane and responsible, from within a body that seems anesthetized; Bill Murray as Margot's husband and father-surrogate, an Oliver Sacks-like neurologist who snickers openly at his weirdo subjects; Danny Glover as the gentlemanly and inept Henry Sherman; and Owen Wilson, who plays the most desperate of the characters and the most successful, the popular novelist Eli Cash. Residents of the imaginary Gotham need someone to supply them with fantasies of other nonplaces, such as the primitive, authentic West. Eli does the job, and pays the cost of having bad mescaline dreams leak out of his head.

It's clear enough why this theme of dreams and disappointments should appeal to Anderson and Wilson, who themselves achieved a precocious success. You might read The Royal Tenenbaums as a film by bright young people who are brooding too much over their next move; and you wouldn't be wrong. But early triumphs and long slides into mediocrity have long played their part in the myth of Gotham. So, too, has the occasional late redemption.

The second time I watched the Tenenbaums, the young-adult archness seemed to me like Eli's prep-school outfit, which he wears until far too late in life. When you realize why he's changed it for a preposterous Western get-up–something that only makes him look more like a kid–you understand he should have stayed in the blue blazer. He might not like what it symbolizes, but it suits him.

The whimsy suits The Royal Tenenbaums, too. It's the smile of two filmmakers who seem to feel sad, but can't hide their delight in what they do. It's the dirty grin of Gene Hackman, shoplifting his way into your heart.