She was first noticed in her steeply traditional Sloane Ranger outfits, the blue engagement suit, the ruffled blouses, the single strand of pearls. But in four years, Diana, the princess of Wales, has become a soigne'e, stylish, independent working princess.

She's been credited with making fashion more "glam," for refocusing attention on London designers and, some even say, for having the single greatest influence on fashion today.

That's more than a slight exaggeration. However, Diana is this generation's answer to Audrey Hepburn, Jackie Kennedy and Princess Grace. And while the beautiful wife of the future king of England is more independent and less demure than those with whom she can fairly be compared, in many ways her personal style has affected the way some young people dress today.

In fact, how could she miss? She is a handsome woman with a well-scrubbed look, like many of her contemporaries, and wears clothes that nudge the current styles, rather than conflict or try to change them. Her short hair style, ruffled blouses, choker necklaces, bare shoulders and big hats have prompted young women to say frequently, "This is my Lady Di hat," or refer to the "Lady Di dress" or "Lady Di suit" they just acquired.

Just how many women would wear their necklaces as a headband, as the princess did in Australia recently (when it was reported she suffered from sunburned shoulders), is questionable. But then, how many women have such a necklace?

Says Hardy Amies, who has designed for the queen for years and now has many styles in the princess of Wales' current wardrobe, "she can't fail to be marvelous. She's so good-looking and elegant and today."

"Times are bad in England," designer Bruce Oldfield said during the collections six months back. "There are millions of unemployed, lots of hardship and poverty about and yet frivolity is in the air; people are clutching at fantasies," said Oldfield, who provides lots of the clothes for the women who showcase those fantasies, such as Joan Collins, Queen Noor and, of course, the princess of Wales.

The British press has been a harsh critic, not only sometimes dubbing her styles "frumpy," but taking her to task for her clothing expenditures, which have been reported as up to $250,000 in one year. After one such bout of criticism, the princess, on a trip to Italy, obviously annoyed by it all, kept appearing in clothes she had worn before. That criticism was even more fierce, but it seemed to make little difference to the Italians, who loved the way she stopped and chatted and touched people that she met along the street.

She was pressed on the subject of her clothes on a recent television interview in London for ITN that was repeated, in part, here Thursday night on ABC's "20/20," and responded "Fashion is not my priority."

Indeed not, she has to choose clothes that are "smart" as she says, and that she can work in. Designer Amies repeats a comment he hears often from the queen -- "When I am working, I don't want clothes that don't have buttons."

As a working princess, Diana began to need more clothes. And she got good advice, responding to the designs and designers picked for her by the editors of British Vogue magazine. It was through that connection that she linked up with the Emanuels, whom she asked to design her wedding dress.

Now she relies less on the Vogue editors. She has a coterie of designer pals, including Oldfield and Amies plus Jasper Conran, Bellville Sassoon, Jan Van Velden and Arabella Pollen, with whom she feels comfortable enough to drop by their establishments or have them come to Kensington Palace. The dress she chose for the ITN interview was by Dale Tryon, who has a shop called Kanga.

According to full-time royal watcher Ingrid Seward, editor of Majesty Magazine, Lady Tryon was a friend and confident of Prince Charles before his marriage and for a while Diana resisted wearing her clothes, possibly for that reason. The pale blue, scoop-neck style with a dropped waistline and lots of pleats worn on the television show was the same one she wore during the Live Aid concert at Wembley.

"She wants to be treated not as an ordinary person but as one of the crowd," says designer Amies. "She doesn't want clothes especially made for her, but she thinks what is offered to the rest of the world is right for her, too." It helps that she is a perfect off-the-rack size 8.

When she first caught public attention as a young schoolteacher admired by the bachelor prince, her rather classic clothes fitted the Sloane Ranger tag, referring as much to a lack of emphasis and heavy spending on clothes as the styles themselves. But her own stylish way of wearing them helped to promote a new emphasis on this deeply traditional look of Herme s scarves, Chanel bags, jodhpurs and the like that has become popular among young women often referred to now as BCBG -- Bon Chic Bon Genre -- well-bred style.

But when the first portrait was made, the young Diana was sitting sideways on a palace chair wearing pants. It was clear that she would be very independent on how she should look.

If her hair style, cut for years by Kevin Shanley at Headlines, was her strongest influence, subtle ways she wears things have had an influence as well. When her husband plays polo, for example, she will often wear his watch along with hers, prompting many young women to wear two watches as jewelry.

As she has gotten older, slimmed down, become more aware of her pictures, she has become more soigne'e, the dresses slimmer, occasionally barer, the slits in her skirts deeper. Always within what is proper, but sometimes a little at the edge.

Her clothes are always English, though her husband noted on the trip last year to Italy that he was sure his wife would love to wear the beautiful Italian clothes he saw there. "I have a suspicion," says Seward, "that at home she wears the designs of advanced French designer Azzedine Alaia. But the minute she walks outside, it has to be totally British."