IN THIS BICENTENNIAL celebratory year marking the births of the Grimm Brothers, the flood of folk story collections aimed at young readers is a tsunami worthy of note. Yet it is best to remember at the outset that Jacob and Wilhelm Grimm neither invented folk tale collecting nor considered it nursery fare.

Collections of folk stories have been around since at least the early Greeks. In the Oriental world a thousand years ago there was the famous compilation The Ocean Streams of Story as well as the Arabian Nights Entertainment, which was translated into French in the early 1700s. There was also that great repository of folk wisdom and story, the Bible, and all the subsequent collections of rabbinical tales. The Grimms were latecomers indeed.

As for considering such stories fit only for children, Jacob and Wilhelm were more interested in fostering pride in the German Volkseele or folk soul, setting down their ideas on philology, and being cheerleaders in the Romantic movement. It wasn't until Andrew Lang and other 19th-century British and American folk tale popularizers that legends and fairy tales and folklore as a genre got firmly pushed -- after a complete coat of whitewash -- into the nursery.

Folklore collections meant for children usually have several things in common. First the blood and sex in the old stories have been deftly removed or at least sanitized. For example, not for children is the "Sleeping Beauty" in which she is raped by the overeager prince and wakes up the mother of two. Instead we get a briary wood and a prince with a sword, and wouldn't Freud be pleased! And not for young minds the French peasant version of "Little Red Riding Hood" in which the child, at the behest of the wolf, does a slow striptease which ends with her climbing naked into the bed with the hairy pseudo-grandmother. Second, most collections aimed at the elementary market feature bright and bold pictures, illustrations that can change a young reader's perception of a story in subtle and unremarked ways.

This year's collections are no exceptions to the rule. Colorful and visually appealing, yet they often lack the vigor of the folk spirit.

Tales From the Arabian Nights, retold by James Riordan and illustrated by Victor G. Ambrus (Rand McNally, $11.95), is a perfect example of this. The original stories begin with sexual connotations, the Shah Zeman having killed his wife and her slave lover after finding them together embracing passionately in his bed. But that is hardly appropriate for youth, and what we get in this edition is a rather puzzling "he was shocked to find his wife asleep in bed with a slave by her side." When he cuts off both their heads without further comment, we lose all sympathy for him. So it goes in this otherwise solid and workmanlike retelling by a veteran popularizer. The pictures by Ambrus have a restrained elegance that is decorative but without any real passion.

Madhur Jaffrey's retellings of tales and myths and legends of India, Seasons of Splendor: Tales, Myths and Legends of India (Atheneum, $15.95) has a more immediate feel to it. Jaffrey grew up in an extended Indian family in Delhi and recounts both her childhood experiences with storytelling and the stories themselves. This makes for interesting book-making, but creates a problem as well. The society of India was (and to a great extent still is) quite sexist and Jaffrey's memories are full of unsubtle put-downs of girls that young female readers of today may find offensive. The retold folk material is tantalizing but often feels incomplete, as though there were much more to the story than Jaffrey's memory allows. However, it is a good beginning book and the full color extravagant pictures by British artist Michael Foreman are quite remarkable. They bring an energy and spirit to the book that is sometimes lacking in the text.

Quite the opposite occurs in The Random House Book of Fairy Tales (Random House, $14.95) adapted by Amy Erlich with illustrations by Caldecott Honor artist Diane Goode. The familiar stories -- such as "The Emperor's New Clothes," "Snow White," and "Cinderella" among the 19 retold -- are set down in strong, sprightly language. The author obviously has paid attention to sources, though with all the world's literature to choose from, only five have been used: Grimm, Hans Christian Andersen, Perrault, plus one story from the English tradition and "Beauty and the Beast" from Madama LePrince de Beaumont. This is a less than eclectic compilation. The pictures, though, are anemic, relying on pretty draperies and bubblegum colors -- pinks and blues. Goode has a gorgeous, romantic line but her drawings lack any of the solidity and sense of danger or high drama that are basic to the tales.

The book begins with an introduction by Bruno Bettelheim, a short version of his thesis in The Uses of Enchantment, but it is odd that he so praises a collection that features illustration when in his own book he stated quite firmly "prettified and simplified versions (of fairy tales) . . . subdue their meaning and rob them of all deeper significance" and "illustrated storybooks . . . do not serve the child's best needs . . . The illustrated story is robbed of much content of personal meaning which it could bring to the child who applied only his own visual associations to the story, instead of those of the illustrator."

A MUCH STRONGER if idiosyncratic collection is Alan Garner's Book of British Fairy Tales (Delacorte, $16.95). Garner is, after all, one of the most vigorous and idiosyncratic of the British folklore/fantasy writers today, and this collection reflects his vigorous style and odd taste. A few of the tales are quite familiar -- "Tom Tit Tot", "The Black Bull of Narroway", and "Kate Crackernuts" for example. But others are less well known, and all are retold with power and with a firm sense of the oral tradition. As Garner writes in his introduction, "By nature, fairy tale addresses itself to the ear rather than to the eye." The strong two- color decorative woodcuts by Derek Collard are reminiscent of old chapbook cuts in which many of these stories got their first literary setting.

Another interesting collection is The People Could Fly (Knopf, $12.95). As idiosyncratic in style as Alan Garner is Virginia Hamilton, only her style is black American crossed with a sophisticated literary ear. It sometimes makes for strange sentences: "They heard a noise that sounded as though it was breaking the trees," is one example. This paragraph is another: "One day Little Daughter was pickin some flowers. There was a fence around the house she lived in with her papa. Papa didn't want Little Daughter to run in the forest, where there were wolves. He told Little Daughter never to go out the gate alone." However the collection brings together an interesting 24 American black folktales with striking black- and-white illustrations by the indefatigable Leo and Diane Dillon. Their cover picture of a dozen slaves flying up over a southern landscape is magnificent. They bring an added dimension to the book.

The most original of the collections here considered is Jacqueline Shacter Weiss' Young Brer Rabbit and Other Trickster Tales from the Americas (Stemmer House). She has brought together stories of trickster rabbit from Venezuela, Brazil, Puerto Rico, Colombia and other South American countries. The stories have a zest and punch to them that children -- who will identify with the small hero -- can readily enjoy. The bookmaking, though is uneven with undistinguished full color, black and white, and silhouettes by Clinton Arrowood. Pictures with the same power and personality as the stories would have added more to this otherwise fine collection.