"And They Dance Real Slow in Jackson" is welcome confirmation of two distinct young talents, playwright Jim Leonard Jr. and actress Marcia Gay Harden. The playwright offers a fierce slice of life in a small Indiana town riddled with cruelty and superstition. And the actress, Theater playing a teen-age polio victim confined to a wheelchair and subjected to the abuse of her peers, provides a stunning performance.

Together they make this one of New Playwrights' Theatre's surest ventures since its 1981 production of "The Diviners," which looked at religious fanaticism in small-town Indiana and also happened to come from Leonard's pen. On the basis of these two plays, he is clearly the master of a kind of Indiana Gothic. If you can imagine Thornton Wilder tuning into the perversity and the hysteria in Grovers Corners, instead of the homespun goodness, you have the flavor of Leonard's writing to date.

"Jackson" first surfaced in the 1979 American College Theater Festival, but Leonard has rewritten it considerably since then--deepening, if my memory serves, the character of Elizabeth Willow and sharpening the forces that transform her from a sweet, fresh-faced girl into a woman bludgeoned by madness. Kaleidoscopic in nature, the play jumps back and forth in time, sketching in the townsfolk, Elizabeth's lower-class family, her adolescence and the rituals, mundane and often comic, that are part of a small-town upbringing.

As the title suggests, these fragmented scenes "dance" tantalizingly around a dark, traumatic event in Elizabeth's past. When it is finally played out at the end of Act II, it proves to be something of a shocker. Leonard's method may strike some as scattershot at first. But even in so seemingly tangential a scene as a lodge brother exhorting his "fellow Moose and wives o' Moose" to buy tickets to the annual charity ball ("Is $5 too much for a semiprofessional orchestra?" he asks rhetorically), Leonard is actually establishing the climate that will permit Elizabeth's martyrdom.

Leonard knows the ways of the narrow-minded. He knows their intolerance of anyone who's different and the do-gooder instinct that barely holds that intolerance at bay. He knows, too, that only the thinnest of membranes separates religion and superstition. In Jackson, that membrane is easily pierced. As expertly staged by Tom Evans on an abstract multilevel set, often shrouded in semidarkness, the play's troubled moods are sinister indeed.

At the same time he is painting the town black, Leonard is also probing the psyche of Elizabeth Willow--the loneliness, the sexual repression, the frustrated drive for independence. Harden brilliantly captures the blend of sweetness and hysteria, of helplessness and strength. In one agonizing bid for escape, the actress pulls herself from the wheelchair, slithers down a flight of stairs on her belly, her deadened legs dragging behind her, then hoists herself back into the wheelchair and heads off towards an illusory freedom. The physical exertion of the moment is extraordinary, but so is the determination coursing through the actress' body. Coming, as it does, on the heels of her impeccable portrayal of the stable girl in Source's "Equus," Harden's performance reveals her as a talent of unlimited potential.

She is so good, in fact, that the evening's one shortcoming can really be laid only at Leonard's door: It is hard to envision Elizabeth Willow as more than an unfortunate victim of some ghastly circumstances. Although the play has a surrealistic quality and a splintered shape, it is, at heart, an old-fashioned melodrama. Leonard has endeavored to endow the central character with a willful streak and a forwardness of manner, suggesting that if she doesn't exactly bring on her awful downfall, she somehow contributes to it. Deep down, however, she remains a kissing cousin of the blond heroine, who used to be terrorized by the mustachioed villain and then tied to the railroad tracks.

Still, the playwriting virtues on display are considerable. And in this instance the sometimes erratic performance level at New Playwrights' comes up to meet them. Dion Anderson and Barbara Evans eschew any hint of caricature as Elizabeth's blue-collar parents, who want to be understanding, but will never really understand quite enough. All the other characters--neighbors, school kids, policemen and shopfolk--are played by four actors, who change their ages and personalities with considerable dexterity. Director Evans, who heads the theater department at Hanover College in Indiana, where Leonard first began writing, clearly knows how to get the most out of young performers.

"And They Dance Real Slow in Jackson" may not be a major play, but it is a taut and often terrifying piece of stagecraft. And it is terrifically acted by Harden. Both she and Leonard are headed places. You'd be wise to catch them on the way up.

AND THEY DANCE REAL SLOW IN JACKSON. By Jim Leonard Jr. Directed by Tom Evans. Set and lighting, Jim Albert Hobbs; costumes, Jane Schloss Phelan; music, Lori Laitman. With Marcia Gay Harden, Dion Anderson, Barbara Evans, Buzz Roddy, Lynnie Raybuck, Michael Willis, Mary Ann Nichols. At the New Playwrights' Theatre through April 10.