Valley Weekend : RESTAURANT REVIEW : Diversity Dominates at the Marmalade Cafe : Continental dishes get creative treatment along with Asian, Mideastern and Mexican fare.

After less than two months, Marmalade Cafe looks like a big hit, possibly with extra bases.

The new Sherman Oaks location is the third (counting locations in Santa Monica and Malibu) in a family of attractive upscale cafes, the first in the San Fernando Valley.

Finding your favorite dish should be a simple task. The large menu, which is ambitious and features glimmers of imagination, is California fusion cooking: creative small dishes, colorful salads, sumptuous sandwiches and (generally) over-conceived pastas. Comfort foods such as roast chicken and salmon with tarragon are also included, though the style-conscious might dismiss these dishes as derriere-garde.

One reassuring element is the people who run Marmalade Cafe, the Burns family. Seasoned Valley restaurant-goers probably know Elizabeth Burns from her Bob Burns Restaurants--dinner houses with a Scottish theme specializing in high-standard Continental food.

Continental seems to be making a comeback of late, even being treated with a degree of reverence and nostalgia by those not overdosed on it during the ‘70s and ‘80s. I was one of the overdosees, but happily for me, Continental is far from being the watchword here. Marmalade Cafe was opened by Mrs. Burns’ three children plus a man named Selwyn Yosslowitz, and the new generation fairly overflows with modern ideas.

Asian, Mediterranean and south-of-the-border influences are major players in this kitchen, along with regional American favorites. That explains how baked shiitake and asparagus, Mediterranean eggplant salad and smoked salmon quesadilla can be found cheek to cheek with well-worn American standbys: filet mignon chili, delicious oak-grilled vegetables and a crunchy fried chicken breast with cream gravy.

It’s easy to make a meal from the menu’s “small bites” section. A crackling-crisp smoked salmon quesadilla is smeared with mascarpone instead of cream or Jack cheese--a perfect foil for the good filling of red onions, Roma tomatoes and Irish smoked salmon. The roasted garlic and Parmesan toast is too greasy, but deftly baked shiitake and asparagus has the textual contrast and delicacy of a quality Japanese presentation.

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Smoky, flavorful oak-grilled vegetables such as carrots, zucchini, eggplants and red peppers come with roasted tomatoes, goat cheese and old-fashioned toast points. The traditional Caesar has too much dressing and too few anchovies. But I’m wild for the Mediterranean eggplant salad, a mouth-wateringly fresh creation akin to a chopped Greek salad of feta, olives, onion, cucumber and tomato.

The sandwiches are just plain delightful. Grilled vegetables surface again inside a crusty sourdough roll, enlivened further with a basil and sun-dried tomato concoction the menu calls pesto. B.L.T. goes one initial better--adding an “A” for avocado--and the B.L.T.W/A. sandwich works well on the house pumpernickel bread.

My guests made a lot of noise about the intense, cheesy wild mushroom risotto, but I found it cloying. Chicken Italian sausage rigatoni is enjoyably rich and the noodles are reasonably chewy. Eggplant penne with Kalamata olives, capers, garlic and sun-dried tomato is another possibility.

The cafe’s country-fried chicken breast is a crunchy masterpiece that blends batter, cream gravy and tender white meat with skill. If fried chicken isn’t on your diet, Marmalade Cafe does a fine roast chicken, too, near irresistible when doused in the kitchen’s heady, chipotle pepper sauce. Marmalade Cafe knocks that dish out of the park, if you’re still keeping score.

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DETAILS

* LOCATION: Marmalade Cafe, 14910 Ventura Blvd., Sherman Oaks.

* SUGGESTED DISHES: baked shiitake with asparagus, $6.95; smoked salmon quesadilla, $7.95; Mediterranean eggplant salad, $5.95 (half,) $7.95 (full;) country fried chicken breast, $9.95.

* HOURS: Breakfast 7:30-11 a.m. daily; lunch 11 a.m.-5 p.m. daily; dinner, 5-10 p.m. Sunday-Thursday, 5-11 p.m. Friday-Saturday.

* PRICE: Lunch for two, $18-$32. Full bar. Valet parking.

* CALL: (818) 905-8872.