FOR SEVERAL years now, I`ve adopted the free-market attitude toward my daughter`s choice of books. My philosophy could best be described as "good books drive out bad": I figured that since we had laid down a solid reading foundation of Beatrix Potter, Noddy, and Mother Goose in early childhood, she had developed tastes that could only be satisfied by the best of children`s and young adult books. I was only partly right. At age 10, my daughter shows the same omnivorous reading tendencies as both her parents: she munches her way through Archie comics and Anne of Green Gables equally avidly, though if pressed Katy will admit that the Montgomery books are better stories. It`s gratifying when she voluntarily chooses classics like E. T A. Hoffmann`s story "Nutcracker" or Francis Hodgson Burnett`s novel The Secret Garden, rather than the latest instalment of the Sleepover Friends, the Bad News Ballet, or the Babysitters` Club, but I still believe that she should pick books according to her interests and needs, not mine. One of the differences I have noticed between the literature of my childhood and that of Katy`s is that many children`s books now deal with serious issues and current events. In Coloured Pictures (Sister Vision, 78 pages, $7.95 paper), the subject is racism, and Himani Bannerji deals with it gracefully. The story concerns a boy named Surindar, whose Sikh grandfather has brought back from India some coloured pictures of the temple at Amritsar. At school an Anglo boy catches sight of the pictures, taunts Surindar, and threatens to send the Ku Klux Klan after him and all his friends. Luckily, Surindar has back-up forces: Sujata, a courageous Bengali girl who is willing to stand up to the bullies, his friend Yannis, and their classroom teacher Mr. Stephenson, who organizes a rally against racism and the Klan. Bannerji gives us a gentle and insightful look at Surindar`s family in their Toronto neighbourhood, and describes their pain at some of the bigoted attitudes and comments they encounter. Much to her credit, the author makes her point about the ugliness of racial prejudice without losing the sense of telling a story. My daughter`s unsolicited opinion was that this would be a good book for classroom reading, "so kids could understand how other people feel." Judging by the level of reading difficulty, I`d say the book should suit ages seven through 11. Another genre is the sports-related book, which targets fans who enjoy reading about a particular sport or activity. I was already familiar with the Gymnast and the Saddle Club series before coming across Claire Mackay`s mini-bike series Mini-Bike Hero (Scholastic, 105 pages, $3.95 paper), Mini-Bike Hero (105 pages), Mini-Bike Racer, and Mini Bike Rescue (each 138 pages). The first two books introduce 12 year-old Steve MacPherson, an aspiring mini-biker who must conceal his enthusiasm for biking from his disapproving parents. In Mini-Bike Hero, Steve is befriended by a local bike-shop owner, who teaches him riding tricks that come in handy when Steve must rely on his trusty Bobcat mini bike in a daring rescue effort. The second book, Mini-Bike Racer, is based on a championship race, with a subplot about a dangerous escaped criminal. Finally Steve`s friend, Julie, another mini-biker, gets a book of her own in Mini-Bike Rescue, where Julie meets and matches wits with a con artist. Kids in the seven-to-11 age group will appreciate this action-packed series. In the fantasy/adventure category, there`s Susan Lynn Reynolds`s first novel, Strandia (HarperCollins, 277 pages, $14.95 cloth). The heroine is a girl named Sand, who belongs to the aristocracy of the mythic Island of Strandia. Sand is "raeth" - she possesses the telepathic power to summon dolphins, which work to drive ashore schools of fish to feed the inhabitants. But when faced with an arranged marriage, Sand runs away to create her own life among the common people. The plot has a number of twists and turns: Sand is recaptured and punished by exile to a foreign country, where she learns that Strandia is in danger from a tidal wave. She then undertakes the dangerous voyage back to warn her compatriots of the coming disaster, and in the process must choose between her newfound independence and her inherited status. I must confess that I found some of the episodes slightly silly; those in which Sand (a true child of nature) goes swimming with her dolphin friends reminded me that I`d recently heard the latest New Age fad was ...swimming with dolphins. However, Reynolds has created a charming mythic world, and the underlying theme of strength and self-determination in the face of social pressure is well developed. The Jungian symbolism is obvious to the adult eye, but will probably be lost on younger readers. Children over 12 who like eco-fantasy and fables should enjoy this book. I`ve been a fan of all of Kevin Major`s books, and the latest, Eating Between the Lines (Doubleday, 136 pages, $13.50 paper), is no exception: here`s a bubbly mix of realism and comic fantasy. The narrator is Jackson, a teenager with a voracious appetite for food, talking, books, and life. But his sweet nature and boundless optimism don`t blind him to the fact that he`s seriously behind in his schoolwork, the girl he adores doesn`t notice him, and his parents are drifting toward a divorce. Using a gold coin he`s won, which turns out to have magical powers, Jackson discovers his ability to project himself into the pages of the books he reads. The results are comic and horrifying by turns, as he stumbles through adventures with Ulysses, Huckleberry Finn, and Romeo and Juliet. Major also touches, peripherally, on the sensitive topic of censorship. It`s probably no coincidence that one of the roles Jackson undertakes, and finds himself profoundly affected by, is as the slave Jim in The Adventures of Huckleberry Finn. Major is an immensely entertaining writer, but he`s also sending us a serious message about the importance of allowing children and young adults to experience literature in all its richness - including books that have scenes or language that may distress some. In contrast, another book with a teenage boy as protagonist, R. P MacIntyre`s Yuletide Blues (Thistledown, 176 pages, $16 paper) was a disappointment. The narrator is Lanny, a budding hockey star forced by his parents to take piano lessons - presumably to balance his life between sports and art. When his parents announce that they are planning a Christmas holiday in the sun and that Lanny will stay with his wacky Aunt Daphne while they`re gone, he rebels and begins figuring out ways to raise the ticket money to go with them. Everyone`s plans are revamped when Aunt Daphne is hospitalized after a suicide attempt, and Lanny is instead sent to stay with his Great Aunt Florence, a snooty classical pianist who also happens to be his teacher. While Lanny`s thoughts and conversations are depicted convincingly, the plot is a tangle of secondary themes and subplots, which dolt go anywhere. The story lacks a sharp focus, and any of these themes - family quarrels, suicide, troubles with athletic versus artistic ambitions - would have made the book something more than a teenager`s rant about the unfairness of life. On the other hand, Copper Sunrise (Scholastic, 111 pages, $7.95 paper), by Bryan Buchan, was a pure joy to read. Jamie, the narrator, is a Scottish emigrant whose family has settled in the new world. As Jamie wanders in the woods near their fishing village, he meets a Beothuk boy named Tethani, who, despite the barriers of language and culture between them, becomes his companion. It`s a tale of friendship against the odds, told simply and poetically while weaving in details about life in the colonial settlements of Newfoundland. Because of the inevitably tragic ending, the book may be best suited to grade-school children, possibly ages nine to 13, who are studying history and are ready to discuss the complex issues surrounding early settlements and the clashes between Native people and Europeans.