You lie -- which means act -- beautifully," a producer tells wide-eyed ingenue Margie Chizek early in Henry Jaglom's showbiz-skewering "Hollywood Dreams." By the end, Margie has managed to con everybody but the audience with her art.

You lie — which means act — beautifully,” a producer tells wide-eyed ingenue Margie Chizek early in Henry Jaglom’s showbiz-skewering “Hollywood Dreams.” By the end, Margie has managed to con everybody but the audience with her art. Though it boasts slightly more narrative structure than his other work, Jaglom’s script still serves as a catalyst for wild improvisation, suggesting the inside-jokey result was more fun to make than to watch. Pic delighted a crowd of Jaglom fans, aspiring actors and other Angelenos at the AFI Fest, but outside city limits, only devotees and limited arthouse auds will pay this helter-skelter production much mind.

Jaglom’s work has been compared to that of Robert Altman, and sure enough, both directors show enormous affection for actors, encouraging their troupes to make the roles their own. But Jaglom can’t really be troubled with most of the responsibilities that typically fall on the director’s shoulders. As a result, the movie is hot and cold in its pleasures, delivering moments of unexpected insight and originality even as it lumbers clumsily toward its predictable conclusion.

One moment, Margie (Tanna Frederick) is getting kicked off the couch at a friend’s house, the next she’s relaxing in the Hollywood Hills with a pair of gay producers (Zack Norman, David Proval). An actress’s life can be topsy-turvy like that, and Margie knows how to spot an opportunity.

Sharing a two-story guest house with rising star Robin (Justin Kirk), Margie learns her upstairs neighbor is “SBO” — or “strictly boys only” — when it comes to romance. But when a local journalist (F.X. Feeney) drops by to interview him, she’s more than happy to play his beard.

“I know six A-list actors who are gay and pretend to be straight,” Robin tells her. “I am the only one who pretends to be gay.” It seems Robin’s actually fallen for her and risks sabotaging his career if his patrons (particularly Seymour Cassel as a big-time producer) find out the truth.

In its first half, pic supplies amusing scenarios (Margie volunteers to assist some kids — played by Jaglom’s actual children — film a school project, only to be fired after only two takes), but deviates little from other aspiring-actress stories. Jaglom might as well be describing Hollywood of 20 years ago until the coming-out-as-straight issue arises, at which point the satire suddenly develops fresh teeth.

The relationship develops just as Melissa Leo enters the picture. Playing Margie’s protective Auntie Bee, Leo inhabits the first character to resemble a real human being in the entire movie. She sees right through the phoniness around her and discusses her niece’s sexual confusion with a frankness that reveals more about Margie than the younger actress herself can manage.

It takes a special talent to play a bad actress well, and newcomer Frederick isn’t experienced enough to embrace her character’s insecurities honestly; instead, she pantomimes them as full-blown hysterics. A good actress embraces the ambiguity, as Naomi Watts did in “Mulholland Drive,” willfully allowing auds to wonder where performance ends and reality begins. “Hollywood Dreams” is more like Watts’ less-successful bad-actress satire “Ellie Parker,” where wink-wink self-consciousness cost the character her sincerity.

Riffing on a well-worn subject, Jaglom nevertheless manages to lay bare a fresh facet of Hollywood hypocrisy, and no amount of vamping by Karen Black (as Robin’s phony Stella Adler-inspired acting coach) or mincing by the stereotypically gay couple hosting Margie can dull its edge entirely — though only insiders are likely to appreciate the excursion.

Cinematographer Alan Caudillo brings almost headache-inducing unsteadiness to his handheld camerawork, although the style is matched by Jaglom’s loosey-goosey editing and seems to suit the spontaneity of the performances. Dialogue sounds as if it were recorded in a crowded closet.

Hollywood Dreams

Production

A Rainbow Film Co. production. Produced by Rosemary Marks. Directed, written, edited by Henry Jaglom.

Crew

Camera (color), Alan Caudillo; music, Harriet Schock; set decorator, Shauna Aronson; costume designer, Selby Van Horne; sound, Michael Krikorian, Steve Morantz; line producer, Allison Wilke. Reviewed at AFI Los Angeles Film Festival, Nov. 11, 2006. Running time: 101 MIN.

With

Margie Chizek - Tanna Frederick Robin Mack - Justin Kirk Kaz Naiman - Zack Norman Caesar DiNatale - David Proval Luna - Karen Black Aunt Bee - Melissa Leo
With: Jon Robin Baitz, Seymour Cassel, F.X. Feeney, Sally Kirkland, Kim Kolarich, Keaton Simons, Eric Roberts.
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