The Polaroid Corp. unveiled the long-time dream of its founder at its annual meeting here yesterday - an instant home movie camera that produces films in one minute.

"Polavision" is what the company calls the lightweight zoom lens camera that shoots color film cassettes. But Polaroid founder and chairman Dr. Edwin H. Land termed it "living images" as he triumphantly presented the new technology to 4,000 shareholders and newsmen at the 40th annual stockholders session.

The audience participated in making their own home movies of colorfully costumed dancers who whirled about the cavernous, converted warehouse. The film, despite a slight unsteadiness at times, was rich in color and at least as distinct as a television picture.

Each cassette, which is about the size of a music tape cassette, lasts two minutes and 40 seconds. It is slotted into a viewer which resembles a television with a 12-inch screen. The film is developed as it rewinds automatically within the cassette. There is no threading or spooling necessary. In 90 seconds the viewer throws the film onto the screen.

Polavision's shortcoming may be its lighting. The 8-mm. film it uses has a light sensitivity reading of ASA 40, not nearly as sensitive as most still cameras.Polavisions is equipped with a small, attachable light but it was not demonstrated at the meeting.

Land said Polaroid will eventually add sound to the new camera system. The film made by Polaroid has a magnetic sound track, but Land said he felt the sound qualities of the equipment on the market is too crude to incorporate with his system.

Polavision will be maketed in limited quanities beginning this fall, but a price tag has yet to be placed on the camera. Speculation on the price has ranged anywhere from $100 to $1,000.

Land would only say that the price would be "pleasantly surprising," not to mention "competitive" with regular systems of camera, projector and screen, which Polaroid officials said average more than $300.

Thirty years ago Polaroid introduced the first black and white instant still camera. Land said his concept of an instant movie camera goes back to that time. Last year the Eastman Kodak Co. moved into the billion dollar instant camera business to create strong competition in a field until then monopolized by Polaroid.

For the remarkable Land, a 67-year-old technological visionary whose strong-will ideas on making simple, cheap cameras for the common person has made him one of the richest men in America, Polavision may well be the highlight of his career.

"We visualize this thing being in everyone's living room, being there all the time," Land said.

Last year was a record, McCune said, with worldwide net profits of almost $80 million ($2.43 a share), a 27 per cent increase over the previous year on sales ow $950 million. Sales and earnings continued to climb through the first quarter of this year, McCune said.

To continue its battle with Kodak in the instant still camera field, Polaroid unveiled its latest entry yesterday the "OneStep."

Kodak and Polaroid have sued each other in the U.S., Canada and Great Britain, with Polaroid claiming patent infringement on its competing still instant photo process. Kodak claims that Polaroid's patents are not valid.