Eight-year-old Elizabeth cuts out paper dolls on the living room floor, while her sister Ann, 23, and her English boyfriend play English Renaissance music on guitars uptairs. The chords filter down to the kitchen, which is a jumble of fresh fruit and vegetables, card catalogues and price indexes for limited edition books.

Meanwhile, customers step over Elizabeth's paper creations to reach for books on shelves stretching to high ceilings. You can even find customers walking through family bedrooms in their search for such literary oddities as a 1930s mystery novel by Nancy Spain or the first edition of members by a Civil War general.

Irene Rouse, mother of Elizabeth, Ann and three other children, operates this Alexandria household that doubles as a bookshop, or to be more precise, a bookshop that doubles as a home.

The four-story, 19th Century rowhouse at 1004 Prince St., chock full of about 36,000 rara, used and regular books plus regular family, is the latest in a series of offbeat endeavors that has characterized the 50 years of Irene Rouse - mother, poet, former women's club president, librarian and farmer.

"At times, our life strikes me as a little flaky," admits Irene's husband Bill, who is retiring from the Public Health Service to devote his time to a small building business. "But by now, it's the norm."

Elizabeth shares her bedroom with international relations, medicine, law and psychology. A little cubbyhole, formed by the backsides of bookcases, contains her bunkbed and her few childish accoutrements.

"I honestly hope to clear all this out by the time she's ll," said Rouse.

The second-story master bedroom belonging to Bill and Irene, and a third-floor private apartment set aside for Ann are the only rooms in the rambling house that are free of customers. But they are not free of books.

As often as not, Rouse may be preparing meals or vacuuming when customers arrive. Wary looks occasionaly appear on some customers' faces, as though they fear having mistakenly stepped into the living room of a well-read family - which in fact they have.

Once a month, the Rouse household becomes a salon for artists to present poetry, fiction, photography and musical talents before an audience that has averaged 75 people a session since the series began this spring under the name "Positively Prince Street Productions."

The audience usually includes an even mix of local artists yearning for hard-to-find outlets for their work and employes from Time-Life Books, or "Time Lifers" as they are known locally.

The bookstore, as usual, was the conduit for the salon idea. Says Rouse, who would be a matronly figure if not for a young eyes: "The bookstore is how I meet all my friends anymore."

Time-Lifer Dalton Delan happened into the bookshop one day last November, soon after Rouse moved it from Fairfax City, where it was called the University Bookshop. Delan came looking for Jack Kerouac books to complete his collection ("and she has the best collection outside of Gotham Book Mart," he says). He ended up finding close friends in the Rouse family. Soon they were kicking around the idea of poetry readings.

Delan introduced the idea to public relations people at Time-Life Books as a creative outlet for employes and as a way for the company to participate in its new Alexandria home, where the Time-Life publishing firm has been for two years. The idea flew, to the extent that Time-Life Books pays for lavish refreshments at the sessions and offers slide projectors or other needed accessories.

Bill or Irene Rouse often are among those reading at the sessins. Her poetry describes a lifetime given to gradual liberation from a conservative Southern upbringing in Arlington, where her father was assistant county engineer ("I wanted to grow up to be a surveyor," she recalls). It tells of encroaching suburbia around the Rouses' 240-year-old home in Burke, Va, the pains and joys of raising a family, the change to middle age when most of her children live away from home.

Bill's presentations tell the same story from a different viewpoint. His comical songs recount the headaches of heading a family that for years rotated around his wife's presidency in the Falls Church Junior Women's Club and her operation of the University Bookshop - nights of missed dinners, gatherings to which she invited so many people ("I'm very outgoing," Irene admits) that they bordered on "mob scenes" at the three-acre Burke homestead.

Indeed it was a harried, hectic, happy life by her account, that she tells by linking events to the births of her five children. The early years of starting a family after marrying Bill in 1953; the hard years, when Bill's building business collapsed after a move to Maine; the return to Virginia and a government job to support the growing family. Irene joined the women's club and became president - to her, a major achievement.

Then, with the animation that is always part of her conversation, she describes the 17 years at the Burke farm, where she practiced organic gardening and kept goats for milk. Even then, home was not just a home. For years, the Rouses helped operate a riding stable there, keeping a soft drink machine on the back porch for the kids who came to ride. She tells of a winter night when the electricity was knocked out and she kept her baby son Billy, now 16, warm with bricks heated in the fireplace.

In the meantime, she worked at assorted tasks at the Falls Church Library and finally bought the University Bookshop in 1971 at the suggestin of her daughter Ann, who worked there one Christmas vacation.

In November, her 22-year-old daughter Mary and a friend moved all 36,000 books to Alexandria, and Irene and Bill Rouse turned a new leaf in what they call the "urban phase" of their lives, marked by friends, customers, family and local artists wandering in and out, all aparently quite at home at the bookstore - a bookstore where even business hours don't follow the norm: 11 a.m. to 6 p.m. Mondays through Saturdays and l to 5 p.m. Sundays.

"I have to say with all that has happened here (at the bookshop) in the last year that I've never been happier in my life," Irene Rouse days. "And I'm lucky to be able to say that coming into middle age."