BY JIM DeROGATIS POP MUSIC CRITIC

The 16th annual festival descended upon the Texas capital for four frantic days and four loud nights starting on Wednesday. And while this year's event continued to reflect the uncertainty of the music business as it grapples with the corporate consolidation of the major labels, radio and the concert business, the power and the promise of new music was as strong here as it has ever been.

With dozens of panel discussions during the day and some 1,200 bands performing at more than 50 venues at night, SXSW can be a different experience for every attendee, from musicians to industry professionals to the hundreds of Chicago fans who traveled south for a music-, beer- and barbecue-drenched version of spring break.

Here are the scrambled diary entries from one exhausted critic's notebook.

Wednesday

The festival tends to book the major acts starting on Thursday, but some of the most rewarding sounds I sampled came from smaller names on opening night. You may not have heard of any of these acts yet, but if you're a dedicated rock fan, one or more is likely to cross your radar screen some time this year.

My evening featured, in order, an aggressive set of Gothic-tinged noise-pop from the Athens, Ga., drum-and-guitar duo Jucifer; churning garage rock from Union Youth, a quartet from Bad Bentheim, Germany; spirited punk from North Shore natives Fall Out Boy and Chicagoans Haymarket Riot (who made impressive use of dramatic dynamic shifts); endearingly catchy indie-pop from Milwaukee's Lovelies and Brooklyn's Palomar; more slash-and-burn garage rock from Detroit's Fags, and finally a strong set of New Wave-influenced postpunk from Chicago's We Ragazzi.

Eight good bands in five hours--only at SXSW!

Thursday

After Daniel Lanois' inspiring keynote address, the biggest draw among Thursday's panels was a one-on-one interview with singer-songwriter Liz Phair conducted by Neil Portnow, the new president of the National Academy of Recording Arts & Sciences.

Seemingly unfamiliar with Phair's post-feminist pop, the Grammy bigwig asked exceedingly lame questions, and the artist dodged his most interesting query about how her music has changed since she left Chicago for Los Angeles. But the answer was evident as Phair performed several tunes from her self-titled new album (her first in five years, due on June 24).

The glossy, radio-friendly production and hot-button sexual pandering--one song is entitled "Hot White Cum"--seem to have been carefully engineered to garner the most commercial attention and Madonna-like controversy. Phair has somehow morphed from an indie-rock ingenue to a thirtysomething cross between Sheryl Crow and Avril Lavigne.

Thursday was another busy night of clubbing, though my results were mixed. The garage-rock revival continued courtesy of KVLR, a punishing quartet from Umea, Sweden, but next came three disappointments: the generic techno-pop of London's Simian and New York's the Rapture and the much-anticipated return of Britpop heroes Blur, who suffered from the defection of guitarist Graham Coxon and the fact that bassist Alex James was barred from entering the country because of visa problems.

Thankfully the night ended on a high note with a strong solo acoustic set from another British veteran, Mark Gardener, the former guitarist and vocalist with Ride.

Friday

After the spellbinding panel on artists and activism (see sidebar), I abandoned the Austin Convention Center in favor of the famous Southern restaurant Threadgill's for what was billed as a "Psychedelic Ice-Cream Social" in tribute to Roky Erickson, the '60s legend and former leader of the 13th Floor Elevators.

Plagued by mental and legal problems for decades, Erickson has been nursed back to health in recent years by his brother Sumner, a world-class symphonic tuba player. Roky wasn't quite up to singing, but it hardly mattered, since the likes of R.E.M. guitarist Peter Buck and his Minus Five cohort Scott McCaughey pulled together to perform spirited versions of Erickson classics such as "You're Gonna Miss Me."

Friday night I only managed to catch five acts: Philadelphia's unremarkable indie popsters Laguardia; Vancouver-to-New York transplants and Cure obsessives the Stills; the ridiculously over-hyped Cat Power, who was boring to downright incompetent onstage; Austin's galvanizing art-punks Spoon, who are being primed for fame and fortune by Wilco manager Tony Margherita, and even more fiery, Detroit-style garage rock (are you spotting a trend yet?) from the Datsuns, a take-no-prisoners quartet from Hamilton, New Zealand.

Saturday

The only interesting panel on the final day was a session with Jonathan Adelstein, one of the five commissioners on the FCC currently reviewing the rules for ownership of radio stations. For music lovers, Adelstein is the commission's "good guy," a Democrat who is battling the Republicans over continued deregulation and corporate consolidation.

While Adelstein's statements about the evils of too few companies owning too many stations were inspiring (he noted that one giant, Clear Channel Communications, now owns 1,200 of the 11,000 stations in the U.S.), he wields far less power than FCC Chairman Michael Powell (Secretary of State Colin Powell's son), and the session was like listening to a eunuch talk about the problems in a brothel.

From there I hit the best of the weekend's many parties, a joint shindig thrown by Chicago nightclubs the Hideout and Metro and featuring some 16 Windy City artists. My highlight was a passionate set by the maturing alt-country singer and songwriter Chris Mills, who performed with a quartet of guitar, bass, drums and cello. The nadir: an obnoxiously twee set by Children's Hour, a too-precious guitar and ukulele duo. (Tiny Tim is the only performer who should have ever played ukulele.)

My last night started with the Polyphonic Spree, the 24-piece orchestral pop band that was the biggest discovery of last year's festival; a strong set by Chicago's arty pop songsmith David Singer; an odd sampling of quietly haunting hillbilly folk rock from Miami's Iron & Wine, and finally a high-octane rave-up by Hot Hot Heat, a young Canadian quartet that was branded one of this year's biggest contenders.

Bouncing around the stage with amphetamized insanity, the group offered an updated take on the frantic New Wave pop of early XTC. Primed with a new label (Warner Bros.), a high-powered booking agency and No Doubt's manager, the band hit Austin determined to justify its growing buzz, and it didn't disappoint.

SXSW and the war

While America's pending war with Iraq was on the minds of many of the musicians I spoke with at South by Southwest, their political concerns did not spill over into much of the music I heard.

The festival coincided with a week that found a trio of artists (the Beastie Boys, Billy Bragg and John Mellencamp) rush-releasing anti-war protest songs on the Net and the Dixie Chicks making a controversial statement about President Bush onstage. Against this backdrop, Chicago Tribune rock critic Greg Kot found himself hosting the most timely panel of the conference, a session on artists and activism.

The panel was flanked by two veteran '60s protesters, Wavy Gravy (the Merry Prankster who emceed Woodstock) and John Sinclair (the former leader of the White Panther Party). They noted that while it was slow in coming, the anti-war movement is growing much more quickly now than Vietnam protests did 40 years ago.

"A month ago I was pessimistic," Sinclair said. "Now I have the unbridled optimism of a former acidhead."

Fellow panelists Mike Mills of R.E.M., John Doe of X, indie-rocker Jenny Toomey and former Chicago pundit Neal Pollack all agreed and encouraged artists to speak out. But when the Texas capital hosted an anti-war protest march that drew 7,000 people on Saturday only blocks from the Austin Convention Center, none of the musicians performing at SXSW played for or spoke to the marchers.

Of all the gigs I saw, I only witnessed two artists commenting on current affairs, both with subtle messages.

New Jersey's heartfelt punk rocker Ted Leo opened a solo set at the convention center by covering a Bragg song, and he had duct-taped the message "No War" on his guitar. And when Daniel Lanois performed a few nights earlier, he invited Woodstock veteran Richie Havens to join him for a transcendent version of "Freedom." Said Lanois the following morning: "It just seemed appropriate."

Jim DeRogatis