"Shrek" is this year's animated miracle, as "South Park: The Movie" was in 1999 - a grand sendup of every saccharine Disney movie you've ever seen. From the opening scene, of the ogre Shrek in his outhouse reading the standard 'Once upon a time' fairy tale book and then tearing out the pages to use as toilet paper, to the torture scene of the little Gingerbread Man having his leg removed, to the bluebird of happiness being blown up by the uncontrolled high note of the song Princess Fiona sings to it, the film is a delicious treat. Dreamworks partner and producer Jeffrey Katzenberg has come through with a film that stands beautifully on its own feet, and at the same time more than returns the insults he got from his old bosses at Disney.

'Shrek' is Yiddish for scary, used ironically in this case as the name of the sweet/scary ogre of the title, voiced in a soft Scottish burr by Mike Myers. His private swamp is suddenly overrun by all the creatures of fairy-tale life, who've been relocated by evil Lord Farquaad (John Lithgow). Everybody from the Three Blind Mice to Pinocchio (caught by the Lord's men in a lie - "I'm a real boy," he told them) shows up, and Shrek marches off to see Farquaad and get his privacy back. He's accompanied - dogged, rather - by motormouth Donkey (Eddie Murphy in a brillliant piece of improvisation that takes us back to the glory days of Saturday Night Live). "Yes, he talks," says Shrek. "It's getting him to shut up that's the trick."

But Farquaad has problems of his own. He needs to marry a princess in order to become king, and in another of the film's witty references, this time to "The Dating Game," he's presented by his magic mirror with three bachelorette princesses, one of whom, Snow White, is shown under glass in her coma. He chooses Princess Fiona (Cameron Diaz), locked in the topmost turret of a castle guarded by a flame-breathing dragon. When Shrek and Donkey show up, he tells Shrek that he can have his private swamp back as soon as he brings in Fiona.

Fiona, too, has a secret, that threatens to undercut her feisty personality: her beauty is not quite what it appears to be in daylight. Nevertheless, she is a true princess, and in an homage to "Crouching Tiger, Hidden Dragon" she deals with the nasty Robin Hood and his overly merry men.

Everybody sings and dances in the film, with songs that range from an R & B classic like "Try a Little Tenderness" to "On the Road Again" to Leonard Cohen's sadly ironic "Hallelujah." The writing, by a team that was obviously given their head, is cool, logically plotted, and filled with marvelous references to dozens of corners of American cultural life. The jokes come fast and furious, and the film easily repays a second viewing. The animation reflects the enormous recent advances in computer-generated effects, with well-modeled characters, believable movement, and perfectly matched speech.