C. FRED BUSH, touted by his family as the Top Dog since he had his Picture in Time magazine with the president, ambled around the vice president's residence, toasting in the midwinter sun. C. Fred had the distinct air of the Lord of the Manor, potentate of the property, come into his inheritance.

Barbara Bush seemed as comfortable as C. Fred. She's settled into the job of the vice president's lady and chatelaine of the residence as though she'd been there forever. But since she's run larger houses than this one (notably when her husband was ambassador to China), it isn't surprising that she takes it all in her stride.

Nor does she appear to mind that she's in the vice president's Victorian house on the Naval Observatory Hill instead of the president's classical revival White House, the Bushes' first choice.

"I really feel guilty about Nancy Reagan," she said, standing in the exhilaration of the rare warm winter day. "She's so cooped up. She can't really go outside at all, without a lot of planning. But I can wander around here as much as I like."

For a gardener such as Barbara Bush, the grounds of the residence are a particular pleasure -- rhododendrons, azaleas, daffodils, all waiting to burst into spring glory.

While the inauguration ceremonies were being held, Laurie Firestone, the Bush social assistant, and Bess Abell, Joan Mondale's chief of staff, brought in the orchids Mrs. Bush had bought, and hung the Bush clothes upstairs. The stewards lit the fires and put out the food, and all the multitudinous Bush relatives and friends had a pre-ball ball.

The next day the Bush furniture and such arrived from Texas.

"Joan Mondale worried because we were having this big family party and she wanted everything to be right for it. We were very fortunate," said Mrs. Bush. "No one could have been nicer than Joan and Fritz Mondale. They were so helpful. She left a detailed note about where everything was. Earlier, indeed, right after the election, she called me. She said, 'You'll adore the house.' And her husband made his staff available to my husband.

"Joan Mondale is right. I do love the house. It's the warmest place. A great family house."

Their next party was smaller, but very august. "We had the president and Nancy Reagan over for dinner and to see the house," Mrs. Bush said. "The dining room seemed rather big and cold for just four of us, so we set up a table in front of the fire in the living room.

"That's one of the problems of this house, there isn't a breakfast room. Joan Mondale felt it too. But I don't think there's much we can do about it."

C. Fred had finished his check of the estate, so me moved into the house.

Under C. Fred's interested eye, Mrs. Bush and her press secretary, Susan Porter Rose, unrolled, on the big reception hall rub, her big project, an 8-by-12-foot needlepoint rug.

"I started it in 1975, when we went to Chine," Mrs. Bush said. "I've worked on it in 17 countried and 36 states. I worked on the rug all during the campaign.I've even kept a history of it. I know what I was working on when Georgie Bush [their son] was married, when our grandson was born, on Inauguration Day, when we were visiting CIA stations [when her husband was CIA director].

"I intended the rug for the living room of the house we just sold. As a matter of fact, we bought the gouse to fit the rug. But I don't believe in being house-bound. I know George Bush isn't going to leave us without a house. He says we'll go back to Houston, after Washington. He want to be buried there. But if he goes first, I might fool him and bury him somewhere else.

"We should have reupholstered our living room furniture five years ago, but I was waiting to do it all in apple green to go with the rug." The furniture from their old living room is now in the upstairs sitting room at the residence. When the Reagans came for supper, they all had cocktails first upstairs.

The rug was designed for Mrs. Bush by Eileen Sterling Crawford, a Washington artist, who painted the pattern on needlework canvas. Mrs. Bush said, "She's the artist, I'm the craftsman."

The rug is a water garden, a green background with flowers, frogs, bunny rabbits and birds. It's made in sections, about two feet or so wide, which will be sewn together.

"I get up at 7 a.m., go downstairs and get a cup of coffee and come back and work on the rug. We listen to the news and talk while George gets dressed," she said.

Barbara Bush has finished a smaller rug, about four by six feet, also with animals and flowers by Crawford. It's now in Woodlawn Plantation's needlework exhibit (see story on this page).

C. Fred walked across the unfinished big rug with great authority, to sniff at the needlepointed rabbit. It says much for C. Fred's position in life that Mrs. Bush didn't hit him for walking on the rug. "After all," she said, philosophically, "it's meant to be walked on."

Though not very much. She has no plans at the moment to use the rug downstairs in the public rooms. "I think I'll put it upstairs in our family sitting room, or some dead-end room so it won't get too heavy traffic," she said. "I can't bear the thought of 5,000 people walking on it."

No other evidence of Mrs. Bush's needlework was visible that day, though recently she has made backgammon needlework boards for their five children as well as two cummerbunds for the vice president.

The vice president's residence looks very different from the days when Joan Mondale filled it with the best and the newest of American paintings and sculpture. It seems quieter, less dramatic. The colors are more muted. The accessories all are a part of the house's decoration rather than objects important for their own sake. Nothing stands out or calls for attention.

From American contemporary, the style has changed to Chinese classic. What that says about the vice president's position on China may be deduced.

Most of the accent pieces come from George Bush's tour as American ambassador to the People's Republic of China. Two sections of a mandarin robe, one framed over the fireplace in the reception hall, one over the buffet in the dining room, are very handsome. They show the exquisite "forbidden" or "hidden" stitch, so called because it is so tiny that it strained the eyes of its embroiderers. The robe was made before 1911. Its blue background shows the owner was royal, Mrs. Bush said. They bought it in Peking at the Friendship store, $200 for the two pieces. "We never saw such a good one again," she said. "I saw one of my relatives almost touch it and I told him, 'If you do, I'll cut your finger off.'

"All the other pieces are reproductions," Mrs. Bush said. "I'm a big fake. You don't have to worry about copies."

Around the flowers on the table are a series of Chinese pottery musicians. "We call them Phil Spitalny and His All Girl Orchestra -- you have to be our age to remember them," she said with her characteristic wit. A copy of a Hung Dynasty horse has the place of honor on the buffet. In a handsome antique corner cabinet are two pottery Chinese funereal figures, and a set of plates manufactured by Mottahedeh in New York for the Reagan fund-raising candlelight dinners.

"I bought enough of them to give at Christmas to each of our five children and two grandchildren and Paula Rendon who's lived with us forever. But don't tell them," she said.

Two Chinese ceramic garden seats serve as side tables in the library.

"I plan to borrow some American impressionist paintings from the Corcoran, the National Gallery and, perhaps, the National Museum of American Art," said Mrs. Bush. "I like traditional art. When we were at the United Nations [he was American ambassador to the UN], we borrowed from museums paintings by Mary Cassatt, Maurice Prendergast, John Sloan and a sketch by John Singer Sargent.

The Bushes have borrowed from the Houston Fine Arts Museum an E. Martin Hennings painting of Indians, "Passing By," which hangs over an Oriental chest in the reception hall. Two other paintings downstairs belong to the Bushes. A painting by a Chinese artist of birds is in the living room. An impressionist painting by Doris Wainwright Kennedy reminds Mrs. Bush of John Kennedy.

"I hope people will give the house furniture donations. We especially need some chests. No, it doesn't matter what period, the house is a mixture anyway and I like a mixture. Besides, you can't look a gift horse in the mouth, though I would hope for fairly conservative things. I think we'll have a committee to screen gifts."

Mrs. Bush doesn't plan to use the handmade ceramic tablewear and glass that Joan Mondale chose for the house. But a small bowl made by Joan Mondale herself, has a place of honor in a bookcase in the downstairs library. mExcept for a table supported by two wooden dog figures by Judy McKie, and a round box with a carved face by Robert Troutman, other art/craft furniture and objects given to the house during the Mondale term, including the $4,000 Peter Voulkos ceramic plate and the $3,000 to $10,000 Maria Martinez black ceramic pots, are packed up in an Observatory Hill storage building, awaiting a change of taste.

Joan Mondale held tours to see the four sucessive art collections, borrowed from museums in four regions. Barbara Bush plans extensive entertaining but no tours. Art and art/crafts borrowed for the house during the Mondale tenure are now at the National Museum of American Art. A few pieces from the table service commissioned by Mrs. Mondale are included.

"No one lives in the house in the same way as the previous tenant," said Mrs. Bush. "I found some beautiful gifts from the Rockefellers in the basement." The Rockefellers gave the house Korean and Chinese furniture from his mother's collection. The Mondales did use the American empire table, which expands to seat 12 during their tenure as well as a few of the other pieces.

The basic furnishings, used by all, were bought by the Navy (which still "owns" the house, the former admiral's residence). Happy Rockefeller oversaw the first decoration of the house as the vice president's residence.

"Some things have to be reupholstered," Mrs. Bush said. "After all, the fabric has been on the furniture for more than five years, and a lot of people have sat on them. We have a dog, the Mondales had a cat. I know there's some money for maintenance, though President Reagan won't let anyone redecorate their offices. I don't know how much we can spend yet. Of course I would change the fabrics, it's no fun to do the same thing. But I would stick with neutral colors."

Mrs. Bush plans to use the tableware selected by Betty Ford. Mrs. Ford had chosen the gold-rim, vice president's-seal china and the traditional silver before her husband became president.

Though the decoration was completed not long after Rockefeller came to office, and the Rockefellers gave several parties there, they never lived in the house. The Mondales were the first vice president's family to actually live there, though as did the Rockefellers, they, too, had a Washington house (to which they've now returned).

Joan Mondale started a collection of books by and about American vice presidents. Barbara Bush thinks this is a great idea. And she's adding an under-the-stairs photographic gallery of vice presidents and their families.

"This is our 30th move in 36 years of marriage," Barbara Bush said. She's obviously planning to stay in this house for a while.