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Our Flick of the Week is ”Billy Bathgate,” Robert Benton`s film of the E.L. Doctorow novel about a young hanger-on during the transitional gangland era of thug Dutch Schultz and slick Lucky Luciano.

Using a fly on the wall to observe an era is a time-honored literary tradition, but in Benton`s big-screen version the result is a film that lacks focus. You sit there saying to yourself, ”What`s this movie about?”

Dustin Hoffman plays Schultz, and this is not one of his best roles or performances. The character comes alive only during one of his violent explosions-beating a man to a pulp, shooting another in the face at close range. Otherwise, Schultz is a bore.

And so we look elsewhere for interest. Nicole Kidman is cast as the film`s femme fatale, a mob camp follower who refers to the various men in her life as ”my gangster.” But her character is only a curio.

Loren Dean plays young Billy, a kid from the Bronx who has some pluck and luck, which catches Dutch`s eye and ear. Billy grows sadder and wiser as the film progresses, but his story has little resonance.

Bruce Willis is woefully miscast as a Jewish thug who spouts Yiddish with a bad accent. In fact, Willis seems tongue-tied by the arch dialogue of playwright Tom Stoppard`s script.

Almost by default, the most fascinating character in ”Billy Bathgate”

is Otto Berman, Dutch`s long-suffering, paternal adviser. Veteran actor Steven Hill steals the movie with his world-weary voice and manner. As much as any of the film`s textured visuals by cinematographer Nestor Almendros, Hill`s performance communicates the passage of time.

And to director Benton`s credit, ”Billy Bathgate” has a mature quietness about it. Actors speak slowly and in low tones. A sadness pervades the material, which is rare for a gangster picture. ”Billy Bathgate” plays like a faded memory of unimportant characters.

”Billy Bathgate” is playing at the Biograph, Esquire and outlying theaters. Rated R. (STAR)(STAR) 1/2

Flicks Picks guide

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New this week

– ANTONIA AND JANE (Fine Arts). Two British friends each tell the story of their relationship, which contains a secret storm that makes us wonder what has kept them together all these years. They examine their strained friendship at an annual dinner in a slight film that is better in concept than realized here. Not rated. (STAR)(STAR)

– BILLY BATHGATE (Biograph, Esquire and outlying). This week`s Flick of the Week. See above. Rated R. (STAR)(STAR) 1/2

– BLACK ROBE (Fine Arts). Bruce Beresford`s compelling historical drama about French missionaries trying to ”save” Canadian Indians in 1634. If nothing else, this film looks so authentic you want to recommend it for grammar school and high school history classes. ”Dances With Wolves” looks phony by comparison. And what Beresford does that has emotional resonance is communicate the unintentional arrogance of those who presume to ”save”

others. R. (STAR)(STAR)(STAR)

– HIGHLANDER 2: THE QUICKENING (Burnham Plaza, McClurg Court, Webster Place and outlying). One of the most ridiculous pictures this critic has ever seen. And this is not one of those cases where a film is so bad it`s good. It`s just plain awful, combining costly but cheap-looking sets and special effects and a goofball script. Sean Connery and Christopher Lambert are warriors from the planet Zeist, banished to Earth, who combat thugs who have taken advantage of a hole in our ozone layer to rule the world. What this amounts to is a low-rent version of ”The Road Warrior” mixed with flashing lights from the disco era. Connery hangs around grinning because he probably cashed a major paycheck for a week`s work. Lambert, the star of ”Greystoke,” has all the charisma of an underwear model. And about that subtitle, ”The Quickening,” is refers to a union of souls between Connery and Lambert. It could become a pickup line in singles bars. R. (STAR)

– 29TH STREET (Water Tower and outlying). An uneven, fanciful comedy based on the true story of a lucky Italian New Yorker who was a finalist in a 1976 lottery drawing for $6.2 million. Anthony LaPaglia, who made a splash in Alan Alda`s little-seen ”Betsy`s Wedding,” plays Frank Pesce Jr., whose incredible luck at gambling and other activities drives his father (Danny Aiello) nuts. The ethnic humor here is all too familiar; the Italian family dinner and mob dialogue are becoming cliches. A fresh ending, however, does maintain our interest. R. (STAR)(STAR) 1/2

– YEAR OF THE GUN (Water Tower, Webster Place and outlying). John Frankenheimer`s convoluted drama employs that old formula of the innocent man who is wrongly accused. The victim here is a young American reporter (Andrew McCarthy) in Italy in 1978 during the time of the Red Brigade terrorists. His novel-in-progress turns out to be frighteningly prescient about events there; so much so that he is suspected of being a terrorist tool. Also caught up in his story is an American photojournalist (Sharon Stone) and an Italian woman

(Valeria Golino), each with personal agendas. A better cast might have made us care more about this story. With McCarthy in the lead, I was more interested in the Red Brigade. R. (STAR)(STAR)