LAS VEGAS -- This week, at least, the entertainment capital of the world has been Las Vegas.

Here, where the sixth annual convention of the Video Software Dealers Association winds down its four-day run tonight, thousands of video retailers from around the country are treated to a taste of the glamor, flash and star treatment they associate with Hollywood.

This year they feel they deserve it: 1986 marked the first year that video rental revenues exceeded movie ticket sales, and the studios' home video division earnings are fast closing in on their film rentals to theaters. The studios uniformly predict 15 to 20 percent growth for their video divisions in 1988.

But much of that growth will come from film sales (with more films priced at less than $20 to feed the fire). As a result, it's unclear how much the 22,000 domestic video dealers will share in the prosperity, as most still depend on rentals for the bulk of their business. Prices on rental movies are climbing, and dealers are going to have more trouble keeping an inventory that has enough variety to make renters happy.

If anything, the renter may find himself in a more frustrating -- and expensive -- position. If more companies follow HBO Video's lead on pricing "Platoon" at almost $100, video stores will be forced to raise rental fees, if only on the most popular titles. And big movies will be in greater demand because the studios will spend more on advertising.

In fact, the studio presentations here felt at times like one long preview leading up to a feature that never materialized. The retailers realize the feature doesn't start until it hits their shelves, and expressed their approval or dread accordingly. Movies with titles ending in II, III or IV garnered whistles and applause, while others earned groans.

"I see they're putting out 'Ishtar,' " lamented one urban dealer. "I'll have to buy that. I hope it doesn't come out the same day as 'Jean de Florette,' because I might not be able to afford both."

All eyes on the floor are drawn to the "Platoon" poster hanging over a bunker carved into an aluminum and neon palm grove at the HBO Video booth. And all eyes are on the daily developments in a full-fledged video war over the film.

For Vestron, the independent supplier that contracted to handle the film until production company Hemdale sold the rights to HBO, it's really war. Still reeling from a recent multimillion-dollar quarterly loss and a subsequent round of executive layoffs, Vestron badly needs "Platoon" and isn't giving it up without a fight. Last Thursday, a Los Angeles Superior Court judge ruled that Vestron's late payment to Hemdale did not constitute the breach of contract Hemdale claimed when it started shopping the film around.

At the lunch for 4,000 that Vestron hosted Monday to tout its fall lineup, President Jon Peisinger donned a pith helmet to stake Vestron's claim on the film. The cheering stopped, however, when he said, "Anyone selling or renting copies of 'Platoon' from HBO is equally liable for copyright infringement," a threat to the retailers who have no say in the matter.

HBO maintains it is entitled to proceed with its plans, citing two judges' refusals to grant injunctions preventing it from doing so. Vestron's only recourse, according to HBO, is to seek damages from Hemdale; HBO also offered to protect retailers in the "highly unlikely" event that Vestron obtains an injunction. And HBO Video chief executive Frank O'Connell took the podium at yesterday's HBO breakfast to chastise Peisinger for "resorting to threats."

Retailers were less than pleased with Vestron's saber rattling. Some vowed to boycott Vestron, while others plan to buy the movie whatever the label. Meanwhile at the HBO bunker, the "Platoon" sound track's mournful rendition of Samuel Barber's "Adagio for Strings" reminds people here that sometimes the enemy can indeed be very difficult to identify.

No Hollywood road show would be complete without celebrities, and exhibitors kept the autograph seekers busy with their round robin of home video stars. "Family Ties" supporting player Scott Valentine talked up "My Demon Lover," his feature film debut; Debbie Reynolds announced the rerelease of her exercise video; and Dennis Hopper did double duty for both "Hoosiers" and "River's Edge."

A few came ready to discuss the causes espoused by their cassettes. Since completing her safe-sex video, Morgan Fairchild has finished off a show on the topic for fall broadcast, and last week put in an appearance at an Atlanta conference on AIDS and minorities. Her involvement stems in part, she says, from her lifelong interest in medicine; she quickly developed a reputation in Hollywood as someone who could answer her colleagues' questions, and found herself in great demand. "It got around that Fairchild knew what she was talking about," she explains.

Antismoking spokesman Larry Hagman put in an appearance to remind retailers of his stop-smoking video and took the opportunity to criticize what he perceives as the government's failure to address the 350,000 annual smoking-related deaths. "Nobody does anything about the tobacco industry because it pays millions of dollars in taxes," he says.

No matter how vital home video has become to their employers, few stars are eager to linger in Las Vegas in August, and many performed their duties with remarkable dispatch. Keynoter and Motion Picture Association of America President Jack Valenti spent a total of seven hours on the ground before returning to what he considers the "entertainment capital of the world," Washington, D.C. Carol Burnett jetted in for four hours to announce a pair of compilation tapes from her variety series. Fitness video star Martina Navratilova outpaced them all, with only two hours of autographing between landing and takeoff, with a fast food stop in between.

Doug and Bonnie Clift are what the VSDA convention is all about, the proverbial mom-and-pop video retailer -- they've even put their kids to work in their Oklahoma City store. A former oil tools worker, Doug divided his time between Oklahoma and Alaska for two years before their store was self-supporting. They are here to find ideas to keep them competitive with the national chains; they're also thinking about entering a screen-test competition underway at the New World Video booth, which will reward the winner with a walk-on role in an upcoming production. Doug is wary: He knows from his experience filming TV ads from his store that Bonnie needs a few takes to warm up.

The Clifts attribute their continued success to more than their TV campaign. They got off on the right foot by not requiring checks or credit cards for initial deposits. "A lot of these people don't have checking accounts," says Doug, "but when they gave me $15, brought back the tapes, and got their $15 back, it was loyalty to the max." Another loyalty builder, he feels, is the satisfaction his customers get from seeing a small start-up business thrive. "They like to see the business grow, and see their money doing more things for them, because they want to be a part of a successful thing. They see us working Friday and Saturday nights, and know we're earning what we get."

Bonnie wonders if the studios understand their customers. "It's a blue-collar business," she says. "More affluent people have other forms of entertainment -- they can go to New York or San Francisco. But our customers have to rent the travel tapes to see San Francisco."

One of the new exhibitors has one of the most respected names in the entertainment industry. Orion Home Video entered the business a little late ecause, until recently, it depended on the sales of video rights to finance its productions. Such Orion features as "Amadeus" and "Hannah and Her Sisters" have made plenty of money for other video firms, but Orion stands to make more by going it alone. Those additional revenues will now be part of the initial budgets for new productions, said chairman Larry Hilford. Orion, like everyone else, will need it, he points out, since only one in 100 movies earns a profit in the theaters.

By having its pictures and its own video label, the studio benefits further from all the groundwork that the theatrical release represents. Hilford sees a "line of resistance of getting {viewers} off their tails" and into both theaters and video stores. Now his video division can capitalize on his film efforts. If the company's first release, Burt Reynolds' "Malone," doesn't cause any stampede when it hits stores next month, Orion only has to wait until early next year, when "RoboCop" drives onto home screens.

Five years after he compared its members to the parasites of the movie business, MPAA President Valenti got before the VSDA and declared, "Once we were adversaries. Now we are not." The reason: The studios that Valenti represents once worried about their copyrights and came to realize that videocassettes offered an opportunity, not a threat. Valenti wasn't worried about facing the crowd he once had enthusiastically denounced. "I'm a professional, so I never get involved personally with anybody," he said after delivering the conference's keynote address. "I've learned that I don't have personal friends or enemies, but I do have personal interests."

This time out, Valenti received sympathetic applause for his lone reference to parasites -- he estimated that 5 to 10 percent of video retailers here were involved in the unauthorized duplications of cassettes. After the 1985 revamping of the copyright law, they can be sent to prison after a first offense. "First offenders go to the goddam slammer, folks, we mean to put them there."

No one complained.