Siggraph is an annual conference for anyone interested in the collision of graphics and computers, and for a long time it grew and grew. But all that changed and a new downward trend emerged. This year it shrank yet again.

One reason why was the economy. Many, many companies that have booked space to show their latest wares, both hard and soft, stayed away to save money. The same was true of attendees.

In past years, Siggraph has easily drawn more than 50,000 users and sellers of graphics goodies but this year in Los Angeles attendance was down to 34,000.

This generated some odd behaviour. Alias/Wavefront, the industry leader in 3D modelling and animation software, had previously announced a user group meeting - and a charge of $195 per head to attend it. Many balked at paying any money, and especially serious money, for the privilege of being advertised to and refused to go.

Last year in New Orleans, Alias/Wavefront attracted 5,000 people to the event; this year, at the same point in the run up to the conference, it had 50 RSVPs. So it cancelled the meeting. At the last minute, it announced a party instead.

In some ways, it may be a good thing for the company. The people who were left were, for the most part, the die-hards and the professionals, rather than merely the curious and the trendy. And with a smaller exhibition and fewer people, it was easier to have in-depth conversations about who was doing what and where.

The diminished scale of the event reminded many old-timers of the early days of Siggraph, in the 1970s, when it was as much a self-help group as a consumer fest.

The nature of the products shown seemed to reinforce that notion. Not since the early days of Alias itself, when it was one man behind a card table, were there so many obscure little software companies, plugging away at the fringes of the computer animator's art.

Joe Alter, for example, was selling software to generate hair on computer models, as well as another package to do facial animation. There were packages just to create and animate virtual clothing, or make trees, or perform obscure repair operations on computer-generated geometry.

There are two ways of looking at this kind of thing. One is to regard it as the mad fantasy of individual obsessives - in other words, it's hard to imagine that there is much of a business in just rendering cloth or adding hair.

These guys have just taken their hobbies and brought them to the convention centre to show the rest of us.

On the other hand, so what? You could regard this kind of activity as a manifestation of a healthy interest in, and expansion of, the borders of what is possible in computer-generated imagery.

They may never make a living at it, but Siggraph has always had a certain long-hair-and-sandals personality that it was a shame to watch erode over the past 15 years.

There was some big-company, big-money innovation, however. IBM was showing a nine-million pixel colour display, which was impressive, and NTT was showing its digital projection system as well as its flat-screen high-resolution monitors, both of which were breathtaking. It is now clear that your next television is going to be less than two inches thick and, at least until the novelty wears off, you'll be willing to watch anything, just for the quality of the picture.

The art show continued to grow and consolidate itself as a central and important part of the whole conference.

This year's must-see installation, as perpetually surrounded by bodies as the Mona Lisa, featured a viscous oil saturated with iron filings - the result was a black magnetic goo that responded to powerful electromagnets, to create impressively eerie shapes and movements.

It also managed to wipe out at least one digital video tape, much to the consternation of the tape's owner and the amusement of the crowd.

The highlight of the conference has always been the Electronic Theater, a showing of the year's best works in the computer animation medium. These are drawn not just from Hollywood blockbusters but from academic studies of scientific phenomena, student films and from around the world.

This year Britain had two entries in the final show, one from the Moving Picture Company and the other from Double Negative, whose work for Enemy at the Gate held up well, even in comparison to ILM's amazing orgy of destruction for Pearl Harbour.

There was work from around the world, including the usual Japanese display of organic wiggly things set to hypnotic music.

Intriguingly, the one thing missing from this year's show was commercials - there was only one from ILM. In the past, commercials have been the bread and butter of the computer graphics business but now the big work is reserved for the silver screen. As well as Enemy at the Gate and Pearl Harbour, there were excerpts from Shrek and Pixar's upcoming Monsters Inc.

The sparse exhibition, which petered out at one end of the hall like the fringes of a city as it gives way to countryside, was anchored this year by Sun.

That spot is normally reserved for Silicon Graphics (now SGI), which was there but which is now a spent force. The day after the show, it announced another round of layoffs and the death watch seems in full force.

SGI has been synonymous with computer animation for almost two decades but it is being wiped out by a new generation of fast workstations, combined with powerful graphics cards, which crush SGI's price/performance ratios. Most of the software demonstrated on the show floor was running on Windows NT or Linux machines.

Cheaper, faster, more esoteric - that was Siggraph 2001.