The latest Mini Cooper may be small by the standards of American cars, but it is 2.4 inches longer than last year's model.

First is to pretend youre Matt Damon in The Bourne Identity, grabbing gears and slaloming through traffic as though pursued by assassins.

Second is to cruise in conserving style, returning up to 40 miles a gallon, thanks to new engines that lift the Minis mileage by about 15 percent compared with the previous model.

Slowest but no less satisfying, theres the prowl along a packed boulevard; as you slip the Mini into Houdini-tight parking slots, other drivers marvel at the illusion.

Throw in nearly a half-century of Mini heritage, and its no wonder this cheeky Brit has been adopted as the official car of Hipsterville U.S.A., meaning any place with a surplus of espresso and a shortage of elbow room.

BMWs modern Mini is also a niche car for the times, as continuing strong sales nearly 190,000 worldwide last year attest. In a historical dj vu, the Mini was born from oil-price shocks tied to a Mideast war. The 1956 Suez crisis, in which Egypt nationalized the Suez Canal and was promptly invaded by Britain, France and Israel, led the British government to demand a frugal car for uncertain times.

The answer, designed by Alec Issigonis, was the 1959 Mini. A groundbreaking front-drive car, it became the Adam for millions of small cars from Toyota, Honda and the rest.

Soon after, John Coopers transformation of this simple econobox into a rally-racing world champion made the Mini an international phenomenon.

The 2007 Mini that I recently tested is an all-new design, with styling changes from the 2002-6 model that the company rightly calls evolutionary, but most people would struggle to spot the difference. The redesign was driven in part by new pedestrian safety standards in Europe that require a more upright hood.

Beneath its stylish skin, the Mini received thorough upgrades. A pair of 1.6-liter, all-aluminum 4-cylinder engines, jointly developed by BMW and PSA Peugeot Citron of France, replace the previous cars mediocre cast-iron engines, designed by Chrysler and produced in Brazil.

Tallying horses alone, the 118-horsepower base model (starting at $18,700) and 172-horsepower turbocharged Cooper S ($21,850) dont seem much stronger than before. But especially for the Mini Cooper S, my companion for a week, the engines modern technology including direct injection and BMWs Valvetronic variable timing creates the chunky power curve that the old supercharged model lacked. The 177 pound-feet of peak torque holds steady from 1,500 r.p.m. to 5,000 r.p.m., though a heavy foot can bring on quick spurts of turbo overboost that raise the torque to 192 pound-feet.

Helping to improve the fuel economy of these stronger engines are water pumps that run only when necessary, and variable-flow oil pumps. With its silky Getrag six-speed manual transmission, the S model carries a federal rating of 29 m.p.g. city, 36 m.p.g. highway, versus 25/32 for the previous model. (The base model does even better at 32/40 m.p.g.). Premium fuel is recommended for both engines.

On a rare stint of relatively relaxed driving cruising at 65 m.p.h. the Cooper S delivered 40 m.p.g., easily surpassing the government rating.

The engines only misstep was a brief diesel-esque rumble that occurred at engine speeds just above idle.

As ever, the Mini combines its impressive economy with go-kart performance: Given two lanes and carte blanche, the Mini will chew the license plates off a number of stronger machines. (On lonely twisties in upstate New York, the driver of a Porsche Boxster S surely found my unshakable Mini anything but cute.)

Theres torque steer in first and second gears, the engine yanking the front wheels to the side under hard acceleration. But the taut suspension keeps the power pouring through the front wheels. The new electrically assisted steering is instantaneous and better isolated from road shocks, yet still feels lively and natural.

The cabin remains exceptionally stylish and well finished, though in a sort of boutique-funhouse way. The artfully sculptured seats came decked in buttery burnt-sienna hides (a $1,900 option) that would look at home in any Jaguar.

As before, the tachometer sprouts from the steering column, and toggle switches continue a Mini tradition. The center-mounted speedometer has grown to the size of a wall clock, and now houses the audio controls and the optional navigation screen. A thinner console allows slightly wider foot wells and, finally, the cup holders are repositioned to accept taller drinks.