BY LARRY CARROLL | The eyes of the world are focused on this room, the four hundred seat Samuel Goldwyn movie theater at the Academy of Motion Picture Arts and Sciences building in Beverly Hills. Most of the seats are taped off, being held for the various VIPs who've yet to arrive. Looking at the names taped to them provides a glimpse into the Hollywood caste system: veteran reporters up front, national television and newspapers behind them, foreign media peeking over their shoulders, and local press behind them. It's also reminiscent of High School in that you can see the cliques as you look around the room: the old, cynical reporters; the young, energetic newbies; and the publicists, gathered at the rear of the room and exchanging gossip excitedly.

A man who looks more than a little bit like Leslie Nielsen steps onto the stage that you've no doubt seen on television year after year. He announces that we're eight minutes from going live, and starts doing the sound check. Fake Frank Drebin then begins to crack some jokes, announcing that it's "early... in fact, nearly 400 hours early" (the Oscars were moved up earlier this year for the first time) and saying that he knows no one is listening to him. He's right -- panning the room, you can see one television reporter after another, sharply dressed and with microphone in hand, staring into the bright light of their cameras. Each is spaced just far enough apart to not be in each other's shot, and most make idle chatter with their co-hosts back in the studio; a few others rattle off pre-written pablum from a teleprompter screen.

With one minute to go, the buzz becomes almost deafening. AMPAS President Frank Pierson and three-time Oscar nominee Sigourney Weaver appear on the edge of the stage, smiling and waiting until... the big moment arrives as an intercom counts down the last ten seconds and the show goes live. "Good morning everybody," says Weaver, smiling. "And hold on to your hats."

She ain't kidding. Right away, Weaver and Pierson begin reading the nominees, and right away the surprises begin. For Best Supporting Actress: Shoreh Aghdashloo for House of Sand and Fog, Patricia Clarkson for Pieces of April and Marcia Gay Harden for Mystic River, none of whom were considered front-runners for the nominations and the latter dismissed by most who considered Laura Linney to be the Oscar-possibility for River. The names are spit out rat-a-tat, faster than most people can write them down. The category is rounded out with Holly Hunter (Thirteen) and Renee Zellweger (Cold Mountain), both of whom were expected. Zellweger, who pulled in a Golden Globe in the category just thirty-two hours ago, will clearly be considered the favorite going into the February 29th Oscar ceremony. If I had a vote, I'd pick Aghdashloo, a virtual unknown who gives a heartbreaking performance in House. The Iranian-born Aghdashloo, who would be awoken at her L.A. home when the announcement was made, said that she was thrilled. "My husband rushed in and told me, I was thrilled. I was so happy," said the woman who was forced to flee Iran in 1979. "It was like an out of body experience. I'm so thankful to DreamWorks for supporting this genre of cinema. We haven't seen movies like this for quite a while. It's the right way to educate viewers about the culture in this country. The only way I can describe the nomination; it is an extreme honor."

As the announcements continue, the publicist clique at the rear of the room serve as the cheerleaders for their various films. When you watch the announcements on TV and hear audible gasps after certain names, it's mostly them that you're hearing. Pierson and Weaver move on to Best Supporting Actor: Alec Baldwin for The Cooler, Benicio Del Toro for 21 Grams... and then what may be the biggest shocker of the day. Djimon Hinsou, who has bounced around Hollywood for several years in everything from Amistad to Tomb Raider 2, gets his first Oscar nomination for his role as a dying painter in In America. Audible gasps fill the room. The category is rounded out with Tim Robbins (Mystic River) and Ken Watanabe (The Last Samurai). "It is such an honor to be nominated for an Academy Award, and I am particularly flattered to be in the company of such fine actors." Watanabe would later say. "When I was shooting this film, although I was proud of my work at the time, I never would have imagined in a million years that my performance would take me to the Oscars. It all feels like a dream." The nominations in this category are well deserved, with Hinsou taking away the slot that most critics had assumed would go to Big Fish's Albert Finney. This should be an interesting race as Del Toro gives what might be the best performance of his impressive career in Grams, but his fairly recent Oscar win might work against him. Golden Globe victor Robbins is the favorite, but if Alec Baldwin hasn't ticked off too many Hollywood people over the years, he could pull off an upset.

Next is Best Lead Actress, and it starts with a bang. Frank Pierson stumbles a bit over the name, but when she says "Keisha Castle-Hughes for Whale Rider" the whole room seems to grind to a halt for one split second. A tiny little New Zealand film about a Maori girl and her tribe, no one seemed to even mention her as a possible candidate. This will undoubtedly create one of the big stories of this Oscar season: Castle-Hughes, at 13, is the youngest Best Actress nominee ever. Diane Keaton, as expected, is next nominated for her fine work in Something's Gotta Give. Keaton, amusingly enough, seemed surprised when she learned of the nomination, but perhaps that's why she's such a great actress. "My initial reaction was disbelief," Granny Hall insisted. "To be getting this kind of recognition at this time in my life is just a fantastic honor. When Nancy Meyers created Erica Barry she created a unique character in film. Erica makes us all believe that it's possible to find true love at any age." Then another shocker, once again courtesy of In America: Samantha Morton gets the call for her touching portrayal of a mentally scarred mother and wife. Charlize Theron (Monster) and Naomi Watts (21 Grams) also get nominated, both for the first time in their careers. It's a bit surprising that Jennifer Connelly didn't get a nomination for her fine work in House of Sand and Fog, but the real jaw-dropper is that Academy fave Nicole Kidman also got snubbed. This category now boils down to a grudge match between Keaton and Theron, both Globe winners and both well deserving of their acclaim. I'd give the edge to Theron for three reasons: her movie is a drama, she transformed herself to play the part, and Keaton already has an Oscar on her shelf.

Weaver takes over the podium to announce Best Actor, and begins by taking a deep breath and saying the name Johnny Depp. Depp, who entertained millions with his unexpectedly original take on Jack Sparrow in Pirates of the Caribbean, is a surprising nomination. Who thought an actor could catch the attention of the Academy by making a comedy, no less one based on a theme park ride? The Disney publicists cheer and applaud. Ben Kingsley (House of Sand and Fog) is announced to no one's surprise, and when Jude Law (Cold Mountain)'s name is read, you can hear Miramax representatives collectively breathe a sigh of relief. Last are Bill Murray (Lost in Translation) and Sean Penn (Mystic River), again giving the two Globe winners of drama and comedy a chance to square off. The most notable disses go to perennial nominees Russell Crowe and Jack Nicholson, as well as Tom Cruise -- who can't be too happy that he went to all this trouble to create an Oscar-buzz film only to see his coveted Oscar nomination go to the unknown actor who played his second banana. People were already buzzing about the possibility that he and Nicole would bump into each other on the red carpet this year, but now it seems that will only happen if they meet up at the same sports bar to watch the Oscars on TV. Murray and Penn are the people to beat this year in the category, an intriguing race since Murray is in a comedy and Penn is notoriously anti-awards -- both of which would normally hurt a candidate, but this year they might cancel each other out. If voters are too split to pick one, look for Ben Kingsley to sneak in and grab the little gold man -- as I believe he should.

Best Director appears to be more of a sure thing, as Peter Jackson somehow has still not won an Oscar for his landmark trilogy, an omission the Academy seems certain to correct this year. Jackson pulls in his nomination, as does Sofia Coppola for Lost in Translation, Clint Eastwood for Mystic River, and veteran Peter Weir for Master and Commander. The big bombshell is the announcement of Fernando Meirelles, the director of City of God. The director benefits from an obscure Academy rule that allows pictures entered in the Foreign Language category and not nominated to be resurrected the following year.

By the time the Best Original Screenplay nominees begin, it's clear that the Oscar voters were determined this year to speak their own minds. Hundreds of articles have been written about the "supposed" favorites, and once again they ignore those writers by going with The Barbarian Invasions and Dirty Pretty Things -- both fine screenplays and excellent nominees. Finding Nemo, In America and Lost in Translation also get the nod, as was the general consensus. The Last Samurai, Something's Gotta Give and 21 Grams are the big losers here. Lost in Translation will most likely get the win in what is usually considered to be a consolation prize for the Best Picture loser. Personally, I'd rather see it go to In America, a heartfelt script written by director Jim Sheridan and his two daughters about their real-life experiences moving to the U.S. twenty years ago. Translation's strengths were Coppola's visuals and Murray's improvising, both of which existed beyond the screenplay.

Pierce, dressed in his suit and bright red tie, leans back over as Weaver yields the podium to him to announce the Best Adapted Screenplay nominees. American Splendor is first, the only nomination the critically acclaimed film will receive today. Then City of God, another shocker both because the film came out over a year ago and so few people have seen it. Screenwriter Braulio Mantovani, later reached for comment, would acknowledge his surprise: "I really wasn't expecting this. I'm extremely honored with this nomination." Lord of the Rings: The Return of the King and Mystic River both grab their expected honors, and Seabiscuit surprisingly sneaks in at the end. A well-done job on behalf of the writers, who appreciated the difficulty in translating Laura Hillenbrand's enormous book into script form, but that pick also makes it all the more surprising that they ignored Master and Commander: The Far Side of the World, which melded two difficult novels together. Cold Mountain also gets a huge dis from the Academy here, since it wears its literary lineage so proudly on its sleeve. LOTR deserves the win, and will most likely get it for once again adapting such a difficult text so brilliantly.

This year's Best Animated Feature category is a real snoozer, with Finding Nemo being such a clear-cut favorite that it seems almost pointless to announce anything else. Since fewer animated films were made this year than last, only three nominees were allowed, the other two being the dazzling but obscure Triplets of Belleville and the forgettable Brother Bear. By far, the easiest pick you'll make in your office pool this year.

"And finally, I'm pleased to announce that the films selected as the Best Picture Nominees are... ," Weaver says, taking a deep breath. "The Lord of the Rings... Lost in Translation... Master and Commander... " Something's up: M and C isn't supposed to be more than a second-tier contender. Weaver continues, "... Mystic River... and Seabiscuit." The last announcement is greeted once again by audible gasps as Universal seems to have pulled a Miramax and publicized themselves into a nomination. Speaking of Miramax, if Harvey Weinstein wasn't angered enough by Peter Jackson's comment at the Golden Globes in his direction, he sure will be now that Cold Mountain has officially been left in the cold itself. There's no question that Lord of the Rings is the film to beat, and deservedly so. But there's nothing Oscar voters hate more than being told that something is a sure thing, so a surprise just may be in store yet.

Reflecting back on the nominees, several stories jump out right away. The first nominations for Hinsou and Castle-Hughes, the unexpected triumphs of Johnny Depp, Marcia Gay Harden and Seabiscuit, and City of God and In America seemingly pushing Cold Mountain off the stage. Master and Commander has the second most nominations with ten, yet didn't get two of the noms it was expected for (Russell Crowe and screenplay), while LOTR got eleven nominations but not a single one in an acting category, an Oscar record. Speaking of the epic films, Lord of the Rings is only the second trilogy to have all three films nominated for Best Picture (after the Godfather films). Best Documentary nominees are Balseros, Capturing the Friedmans, The Fog of War, My Architect and The Weather Underground, while Foreign Language Film honors went to The Barbarian Invasions, Evil, The Twilight Samurai, Twin Sisters and Zelary. Sofia Coppola is the first American woman to ever be nominated for Directing, and a win in any of her three competing categories would make her family (Carmine, Francis Ford and Sofia) the second three-generation Oscar winners after the Hustons (Walter, John and Anjelica). Along with Nicole Kidman and Jennifer Connelly, Oscar season "it girl" Scarlett Johansson will be sitting on the couch Oscar night, most likely because her performances in Girl with a Pearl Earring and Lost in Translation split her vote. Lastly, Diane Keaton has now received nominations in each of four successive decades, while Zellweger is the only person out of last year's twenty acting nominees to be nominated this year as well.

With the announcements over, Pierson and Weaver remind everyone to tune in on February 29th to watch them tear open the envelopes. They quickly hug and rush off stage, Weaver to catch a plane and Pierson to face an onslaught of reporters. "I love the diversity of the nominations this year," he said to the throng. "There's such a wonderfully rich number of nominees that gave magnificent performances, it would be interesting to see who the runner ups, you know, the next five films, would have been if we had 10 nominations instead of five. It's just a great, rich field this year. There were predictions in the press that the Oscar voters go for the sentimental or just big epic sort of films. But look at the small films like Lost in Translation and The Barbarian Invasions, things like that doing very very well. I'm so glad that it shows the Oscar voters aren't old tired sentimentalists anymore."

Quotes in hand, television reporters rushed back to do their stand-ups while the print media made their exits. Sitting in the near-empty room fifteen minutes later, it's hard to imagine that this room had the world's attention just a few moments ago. The publicists are already in the lobby, putting various spins on their films' results. What a wild trip it was, and it's not even 6:30 yet. See you next month for the big show.