NATO kicked off its convention in Washington yesterday, but the only bombs were unintentional -- this is the other NATO, the National Association of Theater Owners, the people who show you movies and sell you popcorn and employ your teen-agers.

"Let's sit in the back so we can get outta here," one exhibitor said, as Ted Pedas of Circle Theatres, the stylish chairman of this 60th Diamond Jubilee convention, started into his Washington Welcome.

"Naw," said his friend. "I wanna sit close enough so Valenti can hear me when I boo him."

Jack Valenti, who heads up the Motion Picture Association of America (MPAA is the chief lobbyist for the exhibitors' suppliers, the studios), is the Prince of Darkness to many of the convened -- their prime adversary in the continuing struggle over "blind bidding." Under the blind bidding system, exhibitors are forced to buy pictures before seeing them -- all they have to go on is a list of the "elements" (producer, director, screenwriter, stars). On a big movie like "Close Encounters," the guarantees required of the exhibitors -- the money anted up in advance -- can bring a studio to the break-even point before the picture is released.

"These guarantees allow them to shift the risk over to us," says Chris Zarpas of Circle. "They use our money to recoup their investment. But if a movie drops dead, who suffers?"

The exhibitors, who argue that blind bidding shifts the entire risk to them, have counterattacked; nearly half the states now have statutes that outlaw the practice. The MPAA has retaliated with lawsuits challenging the legislation.

But when Valenti finally ascends to the podium, he says, "We each have to do what we have to do. Let me forget blind bidding," he says, in his attractive drawl. "I find it a repugnant subject anyway."

Valenti launches into a riff made up of poll results, statistics, apothegms, anecdotes, classical allusion, reminiscences of Lyndon Johnson and speculation about human nature, which the crowd eats up -- he's the man it loves to hate, and hates to love.

He gets the biggest hand of the morning.

NATO represents about 9,000 of the country's 19,000 screens. The biggest chain -- General Cinema -- is not a member, but NATO includes most of the heavy hitters, as well as Washington's medium-sized chains and the little guy who has three screens in Montana. The mood among the 2,400 in attendance is distinctly Middle American -- these are people who not only play the national anthem before their meetings, but throw their hands over their hearts and sing; the halls of the Sheraton Washington are filled with the largest collection of Ultrasuede in captivity.

The big issue this year is videocassettes. Theatrical release stimulates sales -- as Mel Harris of Paramount says, "Without the big screen aura the exhibition creates, video is just more television." And videocassettes have helped the exhibitors, since the ancillary revenues make it possible for the studios to keep up a continuous flow of production, even though costs have more than doubled in the last seven years.

The problem, for exhibitors, is the "window" -- the period of time between the theatrical showing and the release of the videocassette. When a videocassette is available at the same time a movie is showing in the theater (as happened, in Washington, with "Repo Man"), there's a danger that ticket sales will drop. On the other hand, you can't finance a movie nowadays without preselling the cassette. Oh, well -- just another thing to negotiate with the Prince of Darkness.

"There was this theater owner in Boston," reminisces Bill Glazer, general manager of Boston's Sack Theaters. "He would never let people in the lobby, even if it was snowing. So there was always a line outside this guy's theater. He used to say, 'People are passing by, there should be a line.' There's something to that. If you get turned away from a movie, the first thing you do when you get home is call your friends and tell them about this movie you couldn't get in to. He's dead now," Glazer says wistfully. "He was trampled to death by an unruly crowd."

The convention is organized around an accompanying trade show. There is a model of something called "The Illuminator," "a special, double aspherical designed quartz lens engineered to put up to 50 percent more light on your screen"; the Mars company has come up with a new Snickers bar the size of your arm. "The theaters want to up per capita purchase," says the man from Mars. "Bigger size seems to be what's hitting in the theaters."

The Orange Whip Corp. offers a drink mix that it promises will yield 80 percent profit. "Six flavors. It doesn't come in lemon anymore," says Joseph Baker Jr. of Orange Whip. "We have replaced it with a drink called Orchada. Tastes like rice pudding. Mexican drink. Hispanic people love it."

There is hardly a glimpse of the lamentable nachos, which everyone agrees were a flop; but movie cuisine seems to have become more health-conscious -- there are placards screaming, "No Preservatives!" and "Only 58 calories!" Even popcorn is not immune. "All the nutritionists recommend popcorn as a snack food," says Tom Jackson of the National Icee Corp., Air-Popt Popcorn Division. "High fiber, low cost. And we've eliminated the cholesterol with a soy-based dressing." Some people will take the fun out of everything.