Candy, by Terry Southern and Mason Hoffenberg; The Magic Christian, by Terry Southern (Penguin, $5.95; $4.95). The outrageous books of one age become the classics of the next -- and so the risqu,e Candy now finds herself in the respectable hands of Penguin paperbacks. Not that she's any less the sweet, naive young girl prey to teachers, houseboys, phony gurus, gynecologists, and hunchbacks, all of them interested in one and the same thing, what Uncle Jack calls "her true warmth." The novel still reads wonderfully well in its satire of sex in the '60s. The Magic Christian is just as good: the chronicles of billionaire Guy Grand, who uses his money to show that everyone has his price -- and that it's often remarkably low. At one point, Grand constructs a huge vat in Chicago, fills it with warm manure and hundred dollar bills, and invites the public to dive in after the money. Despite the scabrous goings-on, Southern's books are an absolute pleasure to read.

The Editors' Choice: New American Stories, Volume 1, compiled by George E. Murphy, Jr. (Bantam/Windstone, $6.95). What were the best short stories of 1984? One way to find out is to ask the people who choose fiction for Esquire, Redbook, Shenandoah, Playboy, Antaeus, and a dozen other magazines. That's just what George Murphy did, and the result is this fine collection, a cross-section of all that's most exciting in the contemporary American short story. Among authors represented are such notables as Laurie Colwin, Thomas McGuane and Anne Tyler, as well as such up-and-coming stars as David Leavitt and Amy Hempel. NONFICTION

Momilies: "As My Mother Used to Say. . .," by Michele Slung (Ballantine, $2.95). Mothers have been handing out advice to their children at least since Eve first told Cain not to pick on Abel. Usually, the kids don't pay much attention to Mom's words of wisdom, but somehow the catch phrases and family aphorisms stay with us throughout our lives. Michele Slung, publishing columnist for Book World, has gathered dozens of the classic maternal warnings into a collection featuring such nostalgic items as: "You're not the only pebble on the beach. . . A lady never sits with her knees parted. . . . You don't have to like me, buster -- I'm your mother . . . Eat your fish, it's brain food. . . No matter what happens, you'll always have your family." Besides these sayings (and many more), Momilies also includes photographs of a few mothers whose children did them proud: Paula Stern Kissinger, Rosalie Mercurio DiMaggio, Grace Hall Hemingway, Pauline Koch Einstein, and several others.

The Crazy Years: Paris in the Twenties, by William Wiser (G.K. Hall, $9.95). Montparnasse, 1919: The painter Modigliani, intoxicated on absinthe and hashish, savagely beats his 19-year-old mistress, Jeanne Hebuterne, in the streets. When the concierge intervenes, he exclaims, "Jeanne and I, we're agreed on an eternal joy." When Modigliani dies in January 1920 of tubercular meningitis, his mistress, far along in pregnancy, leaps to her death from a fifth-story window. The families will allow them to be buried together in (where else?) P Cemetery. With this anecdote William Wiser begins his extremely entertaining, vividly detailed chronicle of the best party this century offered (for Americans, anyway, helped by a very favorable exchange rate). You won't want to miss it.

Freud and His Followers, by Paul Roazen (New York University Press, $15). Readers dissatisfied with, or daunted by, Ernest Jones' monumental life of Freud will find in Roazen's biographical study a less reverential and more colorful account of the early days of psychoanalysis. His book's larger compass also permits him to bring in such semi-legendary satellites (or rival stars) as Tausk, Fliess, Groddeck, Jung, Adler, Ferenczi, Brill, Klein, Erikson, Deutsch, and others.

The Nightmare of Reason: A Life of Franz Kafka, by Ernst Pawel (Vintage, $7.95). Though Max Brod's book on Kafka will always possess a special value (they were after all best friends), this recent biography must now be considered the standard life. Not that it is without fault: strong on Kafka's life and ca"reer, it is exceptional in its sensitivity to Jewish issues but weak in matters of literary interpretation. Still, anyone fascinated by the writer who most haunts the 20th century will want to read Pawel.

The Flight of Ikaros: Travels in Greece During a Civil War, by Kevin Andrews (Penguin, $5.95). Andrews has spent a lifetime interpreting contemporary Greece for English and American readers. This career began in 1947, when he won a fellowship and made excellent use of a heady opportunity: to travel through -- and write about -- remote Greek villages before the inevitable onslaught of progress rent the fabric of indigenous culture. At about the same time his great compatriot Wilfred Thesiger was performing the same service for the Bedouin people of what is now Saudi Arabia. In Andrews' case there is the added interest of the Greek Civil War and "the beginning of an aftermath (the country) hasn't seen the end of yet." POETRY

A Shropshire Lad, by A.E. Housman, engraved by Agnes Miller Parker; Goblin Market, by Christina Rossetti, illustrated by Arthur Rackham; Rubaiyat of Omar Khayyam, by Edward FitzGerald, illustrated by Willy Pog,any; The Compleat Angler, by Izaak Walton, illustrated by Arthur Rackham (Beaufort Books, $6.95; $6.95; $8.95; $12.95). The originals of these illustrated, keepsake editions of four classics of English literature could once be found in the parlor of any cultivated middle-class household. Parker's engravings capture the summery melancholousman's dewey lyrics; Rackham's rat-like goblins caper in the margins of Rossetti's disturbing tale of a forbidden passion, while the same artist's portraits of 17th-century peacefulness mirror Walton's serene prose; and Pogany's lush color vivifies the sybaritic East of Fitzgerald's paean to drink and Persian pleasure.