It's a tire-worn convention of road movies: Pack a vehicle with a family, push it onto a highway and then gauge the explosions that ensue. To paraphrase Sartre, hell is relatives in the same car. But along comes Little Miss Sunshine, which takes all the trappings of the genre and remakes them into something marvelous.

The Hoover family isn't made up of losers, but of potential winners. At least, the man of the house, Richard (Greg Kinnear), believes this to be true, and he should know. Having concocted his own motivational nine-step pyramid scheme for achieving success, which he's impatiently waiting to be accepted for publication, Richard faces the world with a "can-do" attitude buttressed by his own workweek nostrums.

Into the Hoover household comes Sheryl's brother, Frank (Steve Carell), who has just been released from hospital after trying to slash his wrists. Frank is a renowned Proust scholar, probably the leading expert on the French writer in America. But he lost his heart to one of his male grad students, who spurned him for the nation's second-leading expert on Proust, which drove Frank toward suicide.

Their own cares aside, the family's focus falls on its youngest member, Olive (Abigail Breslin), whose dream is to become a beauty queen — and who has just learned that she's a finalist in California's Little Miss Sunshine pageant. With her gangly little girl's body and oversized spectacle frames, Olive looks more like a budding Joyce Carol Oates than a replacement for JonBenet Ramsey. But she's assumed her father's positive attitude, and, with her addict granddad's coaching, she's developed a unique act for the talent portion of the competition.

Because of financial troubles, the family must pile into a Volkswagen minibus (which becomes one of the film's greatest co-stars) and set off from Albuquerque for California. It is on this short jaunt that all of them will have to face their failures, which only puts more pressure on little Olive to be the family's salvation.

Directors Jonathan Dayton and Valerie Faris have a keen eye for the characterless, strip-malled landscape of the United States, and a good ear for the despair that underlies American dialogue. The film's highlight is the eponymous pageant itself, where plain, little Olive is pitted against a troop of grotesquely sexualized baby-women contestants whose own "talents" turn the proceedings into a floorshow for pedophiles. Yet it's Olive's routine (a bit of comic genius) that will scandalize the house.

The performances are excellent. Kinnear's Richard could easily spill over into caricature, but the actor has an expert grasp of his character's very human longings. Carell's lovelorn Proust prof, Arkin's randy, foul-mouthed grandfather and Collette's long-suffering Sheryl are equally fine. The finds are Dano as the silent, dour Dwayne, with his übermann fantasies of joining the Air Force, and young Abigail Breslin as the heartbreakingly innocent Olive.

Though the film ends with a note of hope and reconciliation, it comes at a personal cost to each of the characters, who must forfeit a dream along the hard shoulder of the road. That their losses are often bleakly funny, and that the least suggestion of sentimentality is deftly run down, gives Little Miss Sunshine an intelligence and wryness that seems to be creeping back into American films.