IN MIDDLEBURG, the hounds and horses outnumber the two-leggers about two to one, and the narrow streets are filled with as many Jeeps, pickups and dog-hairy station wagons as Jaguars, Volvos and Mercedes sedans. This quaint colonial village, the center of Virginia's hunt country, has no fast-food restaurants, no parking problem and no stoplights.

There is a blinking yellow light in the center of town.

If at first it appears ostentatious, Middleburg has good reason. About 800 people live within the town's corporate limits, but in the surrounding hills, rolling west for some seven miles along U.S. 50 into Upperville, are an estimated 60 to 100 millionaires living the good life in the foothills of the Blue Ridge, an hour from Washington.

Since before the turn of the century, the nation's wealthy have been attracted to the area for its beautiful, wide-open spaces, which have remained well protected from hungry high-density land developers, and for its geological affinity for horses. (The soil, often bursting with rocks, has a high limestone content which sweetens the grass and provides calcium for growing horses.)

There's another reason: The rich attract the rich. The list of notables with homes in the Middleburg and Upperville areas includes Washington Redskins owner Jack Kent Cooke, Sen. John Warner (R-Va.), a smattering of du Ponts, the Bertram Firestones (she's a Johnson & Johnson heir), Mrs. Archibald Cary Randolph, Paul Mellon and Washington Post publisher Donald E. Graham. New arrivals who've taken an increasingly well-beaten path from the West Coast include actor Robert Duvall and comedian Dick Smothers. (Actor Tab Hunter has moved to another Virginia county; Elizabeth Taylor, who hung her star at the Warner estate in the late '70s and early '80s, has gone back to the West.)

After his inauguration in 1961, President John F. Kennedy leased Glen Ora, a 400-acre estate near Middleburg; within two years the first family had built a 46-acre retreat they called Wexford, named after the Kennedy's ancestral county in Ireland. President Kennedy spent only one weekend at Wexford; he died in Dallas a month later. The estate was sold to a Chinese investor the next year, and later to Texas Gov. William Clements. Ronald Reagan lived at Wexford during the 1980 presidental campaign.

The Kennedys rental helped start a hunt-country boom that continues. Listings often start at $500,000; one of the 10 local realtors, Mt. Vernon's Armfield Properties, offers potential buyers slick full-color, four-page brochures displaying majestic stone mansions with winding drives, stables and ponds.

Former Redskin linebacker and hall-of-famer Sam Huff expects to move into his new home on 22 acres this month. It's next to the somewhat larger spread of team owner Jack Kent Cooke.

"John Cooke {Cooke's son, the Redskins' executive veep} calls it a 'spot,' " says Huff, amused. "I call it a farm. It's my little place in the world. When I was born in West Virginia, I think I dreamed of this place.

"I love to get up early, get on my tractor and cut down a field," says Huff, who used to mow down whole backfields barehanded. He bought his first 10 acres in Middleburg seven years ago, recently added a dozen more, and all the while has been building up Sporting Life Stables, his thoroughbred herd.

If anything's changed most in Middleburg in 200 years, it's the property values. In 1763, Leven Powell paid Joseph Chinn $110 for 500 acres; in 1787 the Loudoun court issued Powell a license to open a store along the much-traveled Hughes's Road, now Washington Street (U.S. 50). At that time Middleburg, which celebrates its bicentennial this year, was primarily a scenic stopover for weary travelers riding from Alexandria to Winchester, then a frontier town in the Shenandoah.

Officially a Confederate town during the Civil War, Middleburg was occupied turn and turn about by Union and Confederate troops but never was a combat zone. One storyteller recalls how Virginia's 2nd Division commander, General Asa Rogers, entertained at his Vine Hill estate the Union officers who had just beaten him in a battle west of town. (The estate, on the western edge of town, now is home to "The Chronicle of the Horse," a national weekly digest.) Col. John Singleton Mosby's operations included the Middleburg area as his legendary Partisan Raiders harried Union supply trains, communications and outposts. After the war Mosby became a well-to-do Warrenton lawyer, a Republican who supported Ulysses S. Grant in 1872. (Although Mosby was said to be a teetotaler, one of Middleburg's newest watering holes is called Mosby's Tavern.)

In their own way, Middleburgers also mended fences with the Northerners: They sold them land. And unlike so many other Piedmont towns, Middleburg was virtually unscathed in the War Between the States.

That, according to Eugene M. Scheel, a local historian, was partly what attracted wealthy sportsmen who came from the north to foxhunt in the late 1890s. Northerners could come to the area and not be reminded of the ravages of war. Also, land was cheaper than in New York, New Jersey or New England.

Scheel says, in a book to be published by the Middleburg Bicentennial Committee later this year, that this turn-of-the-century land rush by northerners to Middleburg and Upperville was well-received by the Virginians. There was a shared affinity for horses; many of the Northerners also came from aristocratic backgrounds. Jobs in non-industrial Middleburg were scarce, so there were willing workers to serve the wealthy newcomers. In that respect, little has changed today. Generations from Loudoun County have been employed by such wealthy gentleman farmers as Paul Mellon and his Rokeby Stables. Two years ago, Forbes magazine estimated Mellon and Cooke to be worth about $600 million each.

"I think the reason people go there is because another kind of person lives there," Suzie Poole says of Middleburg. Poole, a writer/researcher at the National Geographic Society, is a 1970 graduate of the fashionable Foxcroft School outside of town. "When I went to school there I never realized how big and beautiful the estates were. When you're a kid and you go into your friends' homes like that, you take it for granted. Now, after making mortgage payments, you realize how incredible those homes really are."

Big homes, yes. But big heads?

"People like to think Middleburgers are stuffy," says Huff. "They are not. They are some of the nicest people you'll ever meet."

There are even some signs of humor, Middleburg-style, apparent around town. One behind the cash register at the Fun Shop says, Please leave your children with the chauffeur.

Middleburg has developed an affection for tourists. The days when townfolk knew every passerby are gone; these days, attracted by hunt-season events and Virginia's blossoming wineries-and-tours industry, weekend visitors stream into Middleburg's scores of antique, gift and clothing shops with cute names such as The Iron Jockey, High Horse Antiques, Thoroughbreds and Peace & Plenty Antiques that have cropped up in the past decade.

When Tommy and Marianne Dodson opened the Gourmet Kitchen Plus a dozen years ago, in fact, "We didn't have tourists in Middleburg back then," says Marianne. "I think the gas crunch started it, plus the improved roads have helped."

Dodson and her husband, who operates a propane and appliance shop in the rear of their gourmet cookware store, used to "slink out of town on Sundays," but the crush of tourists has put an end to that. "We know they are coming and we have to be prepared for them. We now stay open seven days a week."

Like most of the village's shopkeepers and restaurateurs, Dodson is tickled to have celebrity patrons.

"Jack Kent Cooke is always in here. He loves nail brushes," she says. "One time he was in looking for salt and pepper shakers for his airplane . .."

Across Main Street, collectors browse at the Sporting Gallery, which specializes in early American and Eurporean landscape oils from $5,000 to $200,000. Gallery secretary Dorothy Miller says regular customers include Jacqueline Onassis, singer Wayne Newton, Mellon and Sen. Warner. Past shoppers have included Franklin Roosevelt Jr. and actor Edward G. Robinson.

"It used to be that quite a few people would stop in when they were in Upperville to see Liz Whitney, now Liz Tibbett. She had a lot of movie star friends, like Ronald Reagan and Gene Autry. Jane Russell still comes to see her," says Miller, who makes no bones about who she'd like to see. "I'm waiting for Tom Selleck to come to Middleburg."

Up a couple doors at High Horse Antiques (bright green trim outside, pink walls inside), shop owner Vicky Moon likes to tell about one regular customer who comes before Christmas each year and spends the day roaming the shop, dropping stocking stuffers into eight large shopping bags spread across the floor. Moon, who also publishes the town's monthly newspaper Middleburg Life, won't name the shopper but says the woman spends more than $2,000 on trinkets.

While shopkeepers sometimes enjoy naming celebrity customers, they are steadfastly loyal and refuse to discuss the celebrities' private matters or provide would-be gawkers with a map to the stars' homes.

"A lot of people like to come to Middleburg and not be seen," says Loretta Jillson, who with her husband Brian has operated the Coach Stop for the last 16 years. Two years ago they opened limo service next door, promoted in the restaurant's window by a portrait of NBC "Today Show" weatherman Willard Scott, a regular rider and diner who lives down the road in Paris. The 70-seat restaurant's frequently packed. Jillson says regulars include Duvall and his wife, Jackie Onassis when she is in town, and Joe L. Allbritton, chairman of Riggs National Bank and owner of WJLA-TV. Once, Jillson says, Allbritton requested a pair of stools at the 12-seat counter when making dinner reservations; it's that kind of place. The Coach Stop opens for breakfast at 7 except Sundays (at 8), and dinner is served as late as traffic will bear. Closed Tuesdays.

The local gentry may be attracted to the Coach Stop, but you don't have to be a millionaire to afford a meal there. Eggs benedict is $5.25, a hamburger $1.50 (cheese is 35 cents extra); the priciest dinner item is the 1 1/2-pound lobster with vegetable, salad and homemade biscuits for $17.95.

That's not to say you can't spend money in Middleburg. Across the street at the Red Fox Inn, dinners are generally more expensive, but worth it in the inn's chic colonial setting, complete with fireplaces, well-worn wood floors and old stone walls. How old? Well, owner Turner Reuter Jr., a former steeplechase rider who bought the Inn in 1976, advertises the Red Fox as the "oldest original inn, established circa 1728" and says there's research to back it up; historian Scheel says the inn was actually built in 1827 and lays blame on a confused sign painter.

There's no arguing, however, about the top-notch service or the food -- highlights of which include the peanut soup ($3 a bowl), filet of salmon ($16.50), veal with mushrooms ($17.50). The Red Fox is also one of the largest employers in town if not the largest; the complex includes Mosby's Tavern and Red Fox Fine Art Gallery plus posh overnight quarters priced from $85 to $200 per night at the Red Fox Inn, the Stray Fox Inn and the McConnell House Inn. Reuter also manages the Middleburg Guest Suites, an upscale foxhunter's hostel with rentals by the week or month.

Across Madison Street at the Windsor House, circa 1824, there's more fine colonial cuisine in a romantic setting, with prices and quality comparable to the Red Fox. The Windsor House is also an inn whose two rooms rent for $150 a night.

But while leaders of corporate America surround the town, there's little evidence of big-time business in Middleburg. There are two gas stations, a Tru-Value hardware store, a ServiStar hardware store and a Safeway -- plus a large group of residents who like it that way.

"I don't think there's going to be a Roy Rogers anytime soon," says Huff.