Sandwiched with the advertisement of Camusso sterling silver and the letters of "disgust" and "insult" over the selection of Ayatollah Ruhollah Khomeini as Time magazine's "Man of the Year," is a slick 20-page advertisement in this week's issue that shouts the praises of District of Columbia Mayor Marion Barry's first year in office.

Lorraine Whitlock, Barry's chief Ward 7 political lieutenant, who is identified only as a "community worker," says she is "very pleased."

Ethel D. Lee, identified only as a D.C. public school employe but who was also cochairman of Barry's first anniversary celebration, lauds the new mayor's courage.

American Security Bank president W. Jarvis Moody, whose bank took out a $3,000 full-page ad, compliments the new administration on its "uncanny ability to recognize priority and do something about it."

And Barry -- there are 18 photographs of him in the section -- tells the readers he is "very proud."

The $50,000 special advertising section was paid for by 18 companies in the Washington area. Time billed them at a premium rate 12.6 percent higher than its normal rate. The largest ad in the section is a two-page full color ad for The Washington Star, which is owned by Time Inc.

Bob Burns, manager of Time magazine's Washington division, said the special section was primarily a way for the magazine to sell advertising and to identify potential advertising clients who ordinarily would not buy space from Time.

Burns said Time will make a profit from the production, but he said the profit would be small. "We don't do it as much for the revenue as to be involved in the community," Burns said. Asked how much the magazine had made on last year's section, Burns said, "That's privileged information."

It was "coincidental," Burns said, that three of the persons quoted in the man-on-the-street section were the heads of firms that also took out advertisements.

The 20-page special marked the second year that Time -- which last year included Barry among "50 Faces for America's Future" -- has produced such a special section. It will appear in the estimated 130,000 copies of the Jan. 14 magazine that are distributed in the Washington area.

Advertising executive Don Vogel of ADV Inc., a Washington firm, wrote the report at Time's request.

"My objective is to do a report on the administration's achievements and not its weaknesses," Vogel said. Asked why, for example, he did not point out Whitlock's political ties to Barry, Vogel said the "contraints of space" prohibited it.

Vogel said the choice of Whitlock was suggested by Anita Bonds, who offically is Barry's special assistant for constituents and unofficially is the administration's principal in-house political operative. Whitlock was Ward 7 coordinator for Barry's campaign.

Vogel said non of the persons interviewed for the section was pressured into taking out ads.

Other citizens to be interviewed were recommended by Bonds and by Barry's press secretary. Florence Tate, who said she saw the draft of the article and made some suggestions before it was published.

This is one article, however, for which Barry does not need Whitlock or others to sing his praise. Vogel does it for him, writing of Barry, "He still comes on strong, he still is impatient for change; still ruffles a lot of feathers of complacement peacocks, still what one of his close associates refers to as a 'quick study.'"

Vogel also wrote last year's article. Picking up on Barry's campaign theme -- "Take a Stand" -- that piece asked, "Can a City Take a Stand?"

"Did a city take a stand?" Vogel now asks. "Maybe yes. Maybe no. Only time will tell. But obviously, its new mayor has put his feet down firmly."

Tate, Barry's press secretary, said the administration was a willing participant in the project because "it's good promotion for the city and it costs us nothing."

"Of course they make money off of it," Tate said. "The Washington Post makes money off your stories," she told a reporter. "[But] it's not a promotional piece for the mayor."

Tate said the administration receives several dozen extra copies of the section and uses them to promote the city and its government.

Fourteen persons are quoted in the man-on-the-street section, including congressional leaders, bank presidents, businessmen -- black and white -- and others. Remarks from City Council Chairman Arrington Dixon and Council member Polly Shackleton (D-Ward 3) also are in the section.

Noticeably absent are responses from Del. Walter E. Fauntroy, other members of the City Council, Advisory Neighborhood Commissioners, and representatives of tenant, consumer and senior citizens organizations.

The section contains profiles of top Barry aides, including Housing Director Robert L. Moore, Motion Picture Development office director Richard Maulsby, City Administrator Elijah B. Rogers and Ivanhoe Donaldson, the mayor's general assistant.

There is also a photograph of the "Marion Barry City Slickers" softball team, above a headline that reads, "The Barry Team: Seeking New Directions in Playing the Game of Urban Development."

Tate is quoted in the magazine as saying Barry is "getting a fantastic press."

"There is no such thing as Barry not talking to the press," Tate is quoted as saying."He may not tell them what they want to hear, but he will talk."