Small towns, like books, are worlds unto themselves, where eccentricity can flourish. In Splendora , Timothy John Coldridge returns to his East Texas hometown in the guise of Miss Jessie Gatewood, newly hired bookmobile librarian, soon to become everybody's darling. Decked in Victorian finery, Miss Jessie glitters among a cast of screwball characters portrayed with humor and affection.

Perhaps only in a setting like Splendora, Texas, could the tale of a transvestite coming to terms with his past be as innocent and joyful as this one. Swift's picture of small town life - its competition, gossip, hypocrisy, clannishness, capacity for warmth - is a mixture of caricature and invention sustained by wit. Although the novel's hasty and pat resolution is disappointing, it is saved by an engaging optimism.

Above all, Swift is a good, straightforward storyteller. In fact, Splendora reads like an exuberant fairy tale about a young man's search for himself. It is also very much about appearances: "'I have always liked anything in a fine binding,'" says Miss Jessie to a bookstore owner. Everything - from the remodeled facade of a once spectacular Victorian court-house to a lizard changing colors on a porch - serves as a symbol for this theme. Quest for identity and the nature of appearances come together when Timothy must ultimately decide whether looks are a way to express the secret self, or a mask with which to hide it. (Viking, $8.95)