Two years ago, at its knock-down-drag-out Denver convention, the embattled leadership of the nation's largest postal union thought it had at least one noncontroversial suggestion: the choice of the 1980 convention site. The choice was between Detroit and Honolulu.

With all due respect to Detroit (and it has many fine points) a betting man would have figured that the American Postal Workers Union delegates would have picked Hawaii for their next get-together. Wrong.

In a stick-it-to-the-leadership vote, the convention pickedDetroit, partly because most of the union's top officiers had hinted that Honolulu would be the best place. So here weare today, and for the remainder of this week, several thousand miles from the nearest native palm tree, braced for another wild and wooly convention.

The Detroit connection was favored by many militant union locals from the New York and Northeastern area. They figured it would be easier and cheaper to get more of their people here. They are well-represented. All indications are that this will be another roughhouse.

APWU, like other major postal unions, is facing demands for changes. Many of the nation's 600,000 rank-and-file postal workers are uneasy with the relatively new corporation, the U.S. Postal Service that replaced the old, politically sensitive Post Office Department.

Automation frightens many clerks, letter carriers, mail handlers and other craft workers. They see themselves being replaced by letter-reading and sorting machines. Many others fear that Congress will give a major portion of growing electronic data processing operations to private firms, skimming the cream from postal profit-making services and leading to massive layoffs.

APWU has one of the biggest collections of national officers -- more than 50 -- and the leadership is split in a dozendifferent factions.

The incumbent president is being challenged by his vice president, although the two stood together on the podium two years ago while militants demanding a tougher line and strikes held up convention business for precious hours.

The legislative director of the union is being challenged for his job by his deputy, a situation that hasmade united front lobbying a bit awkward at times.

The bitter election races, to be decided in a mail ballot next month, will mean greater glory, money and prestige for the winners and early retirement or a return to less glamorous postal jobs back home for the Postal Service officials, bug mailers and the public will be watching to see if the union can come up with a program to increase productivity, save workers' jobs from automation and protect Uncle Sam's mail-moving monopoly from being carved up and farmed out to private firms. Many are anxious to take the lucrative parts of mail andparcel delivery from the government and leave it to the Postal Service to get letters to remote spots where -- on a balance sheet -- a 15-cent or 25-cent stamp doesn't cover expenses.

Because mail service is a political bombshell, Congress and the White House have sidestepped many of the problems facing the nation's postal service.

It could be that one of the major domestic problems of the next president -- Carter, Reagan, Anderson or whoever -- will be to decide whether to return the Postal Service to a subsidized "service" tothe public, or let it wither away and be replaced by big business.

This week's convention will be a tipoff to the extent of those problems and to the mood of the workers in this largest federal agency.

The union will be under pressure from members to endorse a presidential candidate, set its bargaining posture for upcoming contract talks, and possiblyto prepare for an economy-crippling strike.

Perhaps the decision to hold the convention in this industrial town, which is suffering major unemployment, the on-again-off-again fortunes of Chrysler and the threat of Japanese automation ofthe U.S. car industry, was right. This may be a good placefor the largest postal union to meet when it debates how best to get its 1980s act in order.