Such a sweet transvestite

Tim Burton's Ed Wood is an insanely generous tribute to a famously terrible film director, the celluloid McGonagall. It must have been a great temptation for Burton to give Wood a talent transfusion from his own brimming supply, to show him as what he wanted to be rather than what he was. Instead Burton has used great delicacy and discretion, and perversely enough has turned out the most realistic film of his career so far, devoted to one of the least realistic lives ever lived on American soil.

When you set yourself to reproduce Ed Wood's working practices, to use a charitable phrase, it must be rather like trying to limbo dance: it can't be easy to get down that low. Production designer Tom Duffield had to come up with duplicates of crumby sets that were only thrown together in the first place: what he produces are like meticulous couture copies of rags. The director of photography, Stefan Czapsky, had to suppress the reflexes of a professional lifetime and multiply the shadows on Wood's sets, as if he could never get enough of them.

Away from the hero's film sets, Burton allows himself the occasional faint flourish. The car on a ghost train that Wood rides with a girlfriend has a suspiciously low-key design on it, and Burton's model shots - coming from someone who achieved prodigies in this line on Beetlejuice - can't help but improve on Wood's. Ed Wood thought that audiences weren't sensitive to matters of continuity, while Burton's aesthetic is of equal love for illusion and the breaking of it.

The script, by Scott Alexander and Larry Karaszewski, is full of good jokes and bizarre situations, but Burton doesn't overplay them. Lines of dialogue that would normally be on the receiving end of a lot of underlining drift past on the sweetly funny melancholy mood of the film: "We want these Baptists to like us" or "I'm terribly allergic to liquids" or "You must be double-jointed... and you must be Hungarian". Even the film's visual jokes are gently handled. The revelation that Wood's cameraman is colour- blind takes on a different character since the film we are watching is itself in black-and-white. We are in the same position of not being able to tell the red dress from the green.

Tim Burton has consistently been drawn to the gothic in his directing career, but he is at his most characteristic when he also resists it. His best work (Beetlejuice and Scissorhands) is sweet-natured, wistful, sceptical about death. The Batman films are insincere by contrast, the products of a genial dreamer wearing a heavy prosthetic frown.

The signature shots in Ed Wood are subversions of the moment in a gothic horror film when the monster is revealed. A woman reading her boyfriend's movie script comes to realise it is a confession of transvestism: when she puts it aside and opens the door, he stands there revealed, in fear and angora, awaiting her reaction. Again: Ed Wood has just met his idol, Bela Lugosi, and drives him home, somehow not noticing the overwhelming evidence of his decline. Lugosi excuses himself to "take his medicine" and Ed goes on watching TV while we see Lugosi in silhouette, fixing up with morphine. Again: a sudden shadow falls across the white uniform of a nurse working in an asylum. Except that this isn't a ghoul claiming a victim but Bela Lugosi, undead but only just, checking in for emergency detoxification.

The point is that there are no monsters, and the pay-off of these subverted shots is a laughter that is often hysterical but never unsympathetic. It certainly seems to be true that Ed Wood exploited himself before he exploited anyone else, since his first script, Glen or Glenda, was indeed a highly autobiographical defence of heterosexual transvestism, not a coming out of the closet but a plea to be allowed to wear the fluffy things he found there. He didn't exploit his entourage of freaks, fat wrestlers and amateur zombies: he just filmed his friends.

Johnny Depp's performance as the hero is highly endearing. His Ed Wood is most at home where he least belongs, on a movie set, miming along to every word of his own terrible dialogue, seemingly unaware that the word "Cut!" can be followed by anything other than "Print! That was perfect!" His most characteristic expression behind the camera is one of incredulous joy: how can anything be this good? To go on making movies, he will do whatever it takes. We get used to his convulsive nod of agreement and eager yelp of "Great!" to any suggestion, however dismal, that might bring financial backing. There are some funny moments when Ed Wood tries to say No, trying to shake his head, but he just can't bring himself to do it.

For once, though, the Academy, who gave Martin Landau the Oscar for best supporting actor for his role as Bela Lugosi, got it right. The relationship between Wood and Lugosi, which has echoes of the director's own friendship - first fan and then director - with Vincent Price, comes across as a sort of innocent version of Sunset Boulevard. And if that means a satire on fame and illusion with the satire taken out, then it has to be faced that certain sorts of sourness are not in Burton's line.

The writers of Ed Wood choose to end the story on a delusional high note: the hero's conviction that with Plan 9 from Outer Space he had made the piece of work by which he would be remembered. In a sense he was right, since the film is regularly cited as the worst ever made, but he died after a long decline, before his failure was anointed by a later generation's campy taste. Would Ed Wood really have felt that a Golden Turkey award was recognition?

By taking such a benign view of its hero, Tim Burton's film risks, despite its exquisitely low-key aesthetics and sweet sense of fun, being just another film about American innocence and enthusiasm, and about how taking things at face value is really the best way. Without Bela Lugosi, in fact, Ed Wood is just Forrest Gump with delusions of grandeur, and the film is an exercise in the pathos of trash rather than the horror of failure.

But there is a single gothic revelation shot that works by double bluff. The camera tracks down a hospital corridor, and looks in through the window of one room. And here for once there is horror: Bela Lugosi tied down and screaming from drug withdrawal.

This shot is unusual not just for its extremity but its absence of a point of view. It isn't something Ed Wood sees, nor something he imagines. How could he imagine it, with his whole being focused on becoming the Orson Welles of schlock? But this shot gives the film some vital depth, with its acknowledgement that for Bela Lugosi, at the end of his life, there was indeed a monster, and the monster was himself.

n On release from tomorrow