The Smithsonian Institution's 2005 National Design Awards were presented last night in New York, but the best of show is on display in a Washington museum.

It's SpaceShipOne, the extraordinary private rocket dreamed up by Burt Rutan, who won the honor for product design from the Cooper-Hewitt National Design Museum, the Smithsonian's Manhattan outpost. Since Oct. 5, his gleaming three-passenger spaceship, with its sprinkling of blue stars and round windows, has been on view at the National Air and Space Museum, where it looks frighteningly small and fragile to have gone so far so fast, and with no government funding.

Last night's announcement of Rutan's design award came a year and 16 days after SpaceShipOne completed its third journey, kazooming into suborbital space at Mach 3 and floating home to the Mojave Desert on flexing wings inspired by a badminton shuttlecock.

That's as good a definition of cutting-edge design as we're likely to see in this lifetime.

The adventure cost Microsoft co-founder Paul Allen $24 million. Rutan won $10 million from the X Foundation for his efforts. Now children can look up in awe as guides explain that in the foreseeable future -- Virgin founder Richard Branson already has placed an order for five second-generation craft -- a new breed of tourist may be able to plunk down cash for a five-minute journey across the threshold of space.

Rutan, who has designed aircraft since the 1960s, was out of the country this week and could not accept the award in person at last night's gala dinner, according to his office. SpaceShipOne's design innovations include a wing that folds up during spaceflight and works as a brake on reentry, and a pressurized cabin. On a videotape at Air and Space, the designer recalls with a decisive snap of his fingers the moment he knew "I had it." As a design model, the feathers of the shuttlecock were "really out there," Rutan says, and he acknowledged the possibility that "we are absolutely crazy."

By contrast, the other five awards announced last night seemed tame, though most of the winners are certifiably avant-garde. For six years the design awards have sought to crystallize a view of the world as an exciting playing field on which imagination is welcome and rules are meant to be challenged, even and especially in the public realm.

Ned Kahn, a Sebastopol, Calif., artist, combines science and art to make installations based on fire, wind and fog. He was honored for landscape design for a portfolio that included "Wind Portal," an installation of 200,000 mirrored disks that move in air currents created by passersby at the BART station at San Francisco International Airport.

The architecture award winner, Diller, Scofidio + Renfro, a New York firm, focused first on fusing architecture with the visual and performing arts. Founding partners Elizabeth Diller and Ricardo Scofidio received a MacArthur Foundation grant in 1999. (Charles Renfro became a partner later.) Projects now in the works include the expansion and renovation of Lincoln Center, a harbor-front building for Boston's Institute of Contemporary Art, and the transformation of a disused elevated rail line in Manhattan into a meandering public park. Awards juror Jeff Speck, director of design at the National Endowment for the Arts, noted that the trophy is meant to signal approval of "pushing the limits."

Stefan Sagmeister's arresting CD covers earned him a trophy for communications, a morphing field formerly known as graphic design. He is best known for turning jewel cases into artful narratives for clients such as the Rolling Stones, Lou Reed and the Talking Heads.

Several top awards were announced over the summer. The award for lifetime achievement was claimed by Eva Zeisel, the ceramics designer, whose 75-year career has been propelled by what she calls "the playful search for beauty." Her softly rounded forms are enjoying a revival at Crate & Barrel, and a retrospective including her Soviet-era work is on view at Hillwood Museum & Gardens through Dec. 4.

Patagonia, the high-performance sports apparel company, was saluted for corporate achievement. The Ventura, Calif., firm has pushed the development of new fabrics and incorporated environmental practices, including wind power, into its manufacturing process.

Cooper-Hewitt Director Paul Warwick Thompson chose Chicago Mayor Richard M. Daley as the year's "design patron." Daley has presided over the transformation of railroad tracks and parking lots in downtown Chicago into Millennium Park through a public-private partnership. The area has a band shell by Frank Gehry, sculpture by Anish Kapoor, an interactive fountain by Jaume Plensa and gardens by Kathryn Gustafson. Daley was traveling in Poland this week and not scheduled to attend the awards gala.

Educators Michael and Katherine McCoy, former directors of design at Cranbrook Academy of Art and teachers at Illinois Institute of Technology and London's Royal College of Art, were saluted with the first "design mind award."

The jury offered a special commendation to Sergio A. Palleroni, a research fellow at the Center for Sustainable Development at University of Texas at Austin, who has organized humanitarian design studios around the world.

The first award for interior design, announced last night, went to an architect, Richard Gluckman of Gluckman Mayner Architects in New York, whose practice includes gallery and museum design, fashion boutiques and installations with contemporary artists such as Richard Serra.

Toledo Studio picked up an award for fashion. Isabel Toledo's work with Ruben Toledo has appeared at the Victoria and Albert Museum and the museum of the Fashion Institute of Technology.

Winners receive no cash prize. Instead, they are required to share their thinking in a program of lectures, studio visits and other programming.

At Air and Space, the SpaceShipOne on exhibit is notable for a dent in the underside. Pilot Mike Melvill explained the deformation by phone from Rutan's company, Scaled Composites, in Mojave, Calif. It was "a badge of honor, so to speak," caused by an unexpected crush of air on reentry during the first flight. The problem was fixed but the Smithsonian asked to have the spaceship just as it appeared after the initial journey. Autographs of well-wishers and staff are visible on the nozzle of the rocket motor.

Melvill, who has flown Rutan's experimental craft for 28 years, describes the designer as a "second edition" of Clarence L. "Kelly" Johnson, a legendary aeronautical engineer who led Lockheed's "Skunk Works" and designed 40 aircraft, including the U-2 spy plane.

"Kelly Johnson was his idol as a kid," Melvill says. "Nobody could tell him what to do. Even the government couldn't get him to bow down. He was abrasive. He was a brilliant designer. Burt's the same way."

SpaceShipTwo is on the drawing board, a cooperative venture with Branson, whose Virgin Galactic company will sell tickets. They will need FAA approval to ferry space tourists beyond the clouds. But Melvill says he hopes that Rutan will finally be allowed to take a trip.

On the appointed day last year, Melvill was in the cockpit going through his checklist when Rutan poked his head in.

The FAA deemed the flight too experimental for passengers, so the pilot was preparing to take off with ballast. At Melvill's urging, Rutan jumped into a seat and closed the door.

"He sat in it for a long time," Melvill said. "He was looking around. I could just picture him wondering what it would be like to see the stars in the middle of the day."

Burt Rutan's SpaceShipOne now soars in the Smithsonian's National Air and Space Museum.Ned Kahn's "Windportal" at the San Francisco Airport BART station features 200,000 fluttering mirrored disks.Eva Zeisel's porcelain works reflect a "playful search for beauty."