"Working with David Lynch means you have to trust him -- a lot," says Naomi Watts, star of the idiosyncratic director's latest bizarre, mind-bending chiller, "Mulholland Drive." "But what man better to trust than (one) who's created such a number of great films with great complex characters?"

Complex doesn't begin to define Watts' role in the film as an ingenuous ingenue mixed up in a dark, cryptic Hollywood mystery. At first Betty Elms seems like an absurdly wide-eyed innocent, fresh off the bus from Ontario with stars in her eyes and dreams of an acting career.

"It's like she's from the 1950s, beaming with optimism and joy," Watts laughs, then describes the exaggeration required of her for the scene in which Betty arrives in L.A. glowing with awe like an adult Shirley Temple. "I remember shooting that moment, and David was like 'Pump it up! It's like the best moment you've ever experienced in your whole life!' I felt like I was psychotic because, I'm not three-and-a-half, you know?"

But as Betty becomes involved with a femme fatale amnesia victim (Laura Harding) and embroiled in investigating the woman's dangerous past, layers of seeming naivete peel away, revealing her to be shrewder than she lets on. Such an acting challenge is what made Watts so enthusiastic to talk about the film during a visit to San Francisco last month.

"When I was first reading (the script) I thought, she's too happy and perky and peppy. I thought, she belongs on a cereal box! Then you get a few pages in and you can tell there's something quite manipulative about her. You can tell that all that lovely, perky happiness is not actually the truth. It's something twisted."

Watts is a petite, slender blonde with the posture of a military guard and an inquisitive personality, peppered with playfulness and sensuality. Getting ready to pose for pictures, she kicks her legs over the arm of her chair, suddenly taking on a seductive sparkle as if someone cranked up a metaphorical volume knob labeled "gorgeousness."

On screen in "Mulholland Drive" she shows astounding range and subtlety as an actress, slowly and resourcefully exposing slivers of Betty's esoteric psyche. After successfully walking a credibility tightrope with the character's innocence in the early going, she shows off Betty's surprising acting chops in a startling audition scene in which she uncorks a wanton sexuality. Then in a typically Lynchian narrative zigzag, the movie's last act jumps backwards in time and Betty mysteriously vanish as Watts morphs into an entirely different character -- a junkie with shocking connections to the enigmatic amnesia victim.

Watts' strung-out performance in these later scenes is astonishing to watch, especially in contrast to the giddy girlishness that comes before it. What may be more surprising is the fact that the actress didn't have to audition for the role -- at least not in the traditional sense.

"(Lynch) has a system where he goes through photographs and pulls out the ones he likes and says, 'I want to meet with these.'" Watts says, noting that if the director had seen any of her movies -- she was Jet Girl in the comic book cult movie "Tank Girl," a prostitute in "Dangerous Beauty," a boarding school student in the early Nicole Kidman vehicle "Flirting" -- he never mentioned them. "He doesn't even look at your credits."

"When I met with him, it was just the two of us sitting down and chatting. Nothing about work, just about life," which was a relief, Watts grins, because "I'm a terrible auditioner."

At the time "Mulholland Drive" was planned as a pilot for Lynch's return to series TV. But even though ABC had a hit with the director's surreal soap opera "Twin Peaks," they passed on this ever more outlandish concept that included such nightmarish characters as a crippled, mobster/movie mogul midget manipulating the lives of susceptible Hollywood denizens.

"There had to be a whole bunch of new ideas added when we found out it was going to be a movie," Watts says, but she declines to offer any more details. "David doesn't like to get into the specifics of what was TV and what was film. It takes away from the mystery. But I'm staggered to this day about how he pulled it all together."