1329 Connecticut Ave. NW. 429-0209.

Open: Monday through Friday for lunch noon to 2:30 p.m.,

Monday through Saturday for dinner 6 p.m. to 10:30 p.m. Closed Sunday. V, MC, AE, DC. No personal checks accepted.

Reservations suggested. Prices: Lunch entrees, $6.75 to $8.95; dinner entrees, $6.95 to $9.95. Full dinner with wine, tax and tip about $25 a person.

THE RED-CHECKED-TABLECLOTH Italian restaurant is back, but it is a new model. This time the antipasto includes far more than salamis and cheese, and the wine list goes way beyond soave and chianti.

The newest red-sauce and red-check Italian restaurant is Otello, just south of Dupont Circle. It is a new incarnation of Piccolo Mondo, the K Street restaurant that has moved several blocks uptown -- and several notches down in price. In this cute rustic dining room decorated mostly by food -- an antipasto table with big loaves of rustic bread and a dessert table -- and mirrored walls and ceilings, no main course on the dinner menu runs more than $10.

The mood is jovial, as if lifted right from a romantic movie where the friendly proprietor fosters the romance of the hero and heroine. Oddly enough, though, the service isn't good, it's just fun -- or at least the servers seem to be having fun. One day at lunch our waiter smiled at us a lot and acted friendly. But we couldn't catch his eye most of the time, then had to ask two or three times for things when we did get his attention. Waiters and busboys have been full of jokes, but long waits and inattention silenced our laughter.

One evening the maitre d'hotel was chitchatting to people at my table about the restaurant business, unaware that I was a critic. Customers consider ambiance the most important part of a restaurant, he said, and service was second. Food came only third, he insisted; people didn't know much about food and didn't care much about it.

His opinion showed.

The dining room is attractive, homey looking and lively. The service is second to that, spirited but needing some work. The food needs even more work.

Anytime I dined at Otello I would start with the antipasto. Then have more antipasto. About a dozen earthenware bowls and platters hold the array: earthy lentil salad, sparkling white marinated squid rings flecked with parsley, slices of marinated eggplant, white beans with tuna, an odd seafood salad that had the texture of octopus but that the waiter assured us was scallops, cucumber salad, cold cuts, sliced tomatoes with fresh basil, vinegar-dressed potato salad and a few losers -- canned baby carrots and watery, salty king crab salad. Still, it is food to make a light meal, and a small plate as an appetizer costs under $4. The problem is that the waiter chooses your assortment for you, and the first time around it consisted of a slice of tomato covering most of the plate, and a few other dabs around it, including those drab canned carrots. Too bad you can't choose your own assortment, or at least guide your waiter to what you like.

There are only two other choices for appetizers: mixed cold cuts and prosciutto with melon. There is also a soup, which was pasta e fagiole and utterly delicious last time I was there, thick but not heavy, with a rich smoky undertone. That with the dense, crusty bread Otello serves, and the antipasto, would send you off thinking this was a fine restaurant.

Not so the pastas and main courses. Spaghetti guitara tasted like watered tomato sauce on ordinary thin spaghetti. Linguine alle vongole had pleasant flavor -- what can go wrong with clams, garlic and parsley? -- but very few clams. Tortellini alla panna e funghi was blandly filled pasta in bland cream sauce with a few mushrooms.

I found less good to say about the main courses. They were all quite ordinary, from the mushy swordfish with tomatoes, a few capers and a single olive to thinly sliced veal, which was decent enough meat but had no character to its texture or its seasoning. There are about 10 main dishes on the dinner menu -- two veal, a chicken dish or two, maybe skewered lamb or sausage with vegetables, and seafoods from shrimp to squid to monkfish. None I tasted stood out: Scallops in spicy sauce tasted hot but not flavorful; lamb cubes were crusty but hadn't acquired much from the marination. It was middling food.

Desserts were more variable, from fine rustic peach tarts and blueberry tarts in a crust quite Italian in its density and richness, to a zuppa inglese that was sweet and alcoholic but needed at least more custard. From my samples of the

custardy desserts I'd recommend sticking to the fruit

tarts. And from my taste

of the coffee -- strong and

bitter but more from age

than from character -- I'd

suggest you don't risk its

keeping you awake.

I like the modest prices

at Otello, and I enjoy the dining room. But some of us would reverse the order of this restaurant's priorities and put food first, service second and ambiance third.