Gillian Welch knows the difference between old time music and bluegrass, and the difference between a music executive and a record man. She knows how to start her own record label, how to be an actress and, incidentally, how to write and sing songs that have earned her a Grammy nomination and the respect of music critics.

She is rather at a loss, however, when asked to describe the songs on her most recent album, "Time (The Revelator)."

"Time," recorded on Welch's newly created Acony label and produced by her longtime collaborator David Rawlings, follows 1996's "Revival" and 1998's "Hell Among the Yearlings." It comes in the wake of her appearances in the film "O Brother! Where Art Thou?," on the accompanying soundtrack album, and in the movie-inspired concert "Down from the Mountain."

"I don't have a very well-formed opinion of them as a whole," Welch says of her new songs.

"Most of the songs were written late last year and this year," she explains, which puts her still "too close" to the songs on "Time" for time to work its revelatory magic.

Or, judging from the recording process, the resonant, spare songs might dwell in a realm of their own.

"There's a tremendous number of first takes on this album," Welch says, pointing to "Elvis Presley Blues" and "I Dream a Highway" as examples. She refers to "I Dream a Highway," a slow, twisting musical exploration that runs nearly 15 minutes, as "an extreme first take."

"We were almost superstitious about it," Welch says, because the composition was more "a whole moment in time" than a song. "We didn't even talk about it until we recorded it," she says, but adds, "I wouldn't trade working on that (song) for anything."

As on "Hell Among the Yearlings," Welch and Rawlings are the only musicians on "Time." Where the former album was more an exercise in mountain music minimalism, however, the new material rings eerily evocative of a larger presence, as Welch points out: "Particularly on this recordÉpeople are literally hearing instruments that aren't there."

"People hear different things" in the two-person album, Welch says. She urges her fans to just "buy the album" and make their own discoveries listening to it, instead of reading a description of its arrangements.

Welch says within the songs is "incorporated aÉrock and roll sensibility," and that "much larger arrangements are continuously implied" in the songs, meaning that whatever the two musicians couldn't directly convey was sonically hinted at, with the intriguing result that the presence of only a pair of players belies what meets the ear.

On "Time," Welch and Rawlings "have the burden, or liberty, (of being) the whole band."

It's a "burden" the two have shared before, and stems from a longtime musical collaboration. Welch, a native of southern California, met Rawlings in the early nineties, when she attended Berklee College of Music in Boston. The two moved to Nashville in 1992.

Although Rawlings doesn't share a billing with Welch - "Time," in fact, marks the first time his photo has appeared on one of their albums - his contributions are instrumental, so to speak, to Welch's music. "He's fairly modest," Welch says, but "an indispensable part" of how she makes music.

Rawlings fills "an editorial capacity," says Welch, who credits his problem-solving skills as those of "a true editor."

"I typically begin a song and get as far as I can with them," Welch explains of her collaboration with him, "and then begins...a ping-pong match" of musical ideas. The creative dialogue continues throughout the songwriting process and into the studio, where Rawlings contributes opinions, a fair share of the picking and subtle, effective harmonies.

Welch has moved from straight acoustic storytelling to something more musically and lyrically circuitous on "Time," but traces of her bluegrass influences - so apparent on "Revival" and "Hell Among the Yearlings" - remain, in her banjo picking and on songs like "Red Clay Halo."

Welch was initially drawn to bluegrass because of "its rawness." "I was listening to really raw early rock-n-roll and...early punk," says Welch; when she first listened to the Stanley Brothers, she heard music that was "equally raw" and "unprettied up," but "the sound was ecstatic - the harmonies."

"My initial reaction," she goes on, "was a body reaction - it was a very deep reaction...which I'm guessing is the reaction that people are having to this ÔO Brother' stuff."

She is careful to point out, however, that the music of the movie's era was old time, not bluegrass: "Chronologically, the movie takes place before bluegrass," she explains.

Although the sound of bluegrass makes appearances on "Time," it was Ô the spirit of the Nashville Sound that was with Welch during the album's recording. The tracks were laid down in historic RCA Studio B in Nashville, which has seen the likes of Elvis and purveyors of the Nashville Sound - like Dottie West, Skeeter Davis and Dolly Parton - pass through. It had turned from a functioning studio into a more of a country music landmark for Nashville tourists, so Welch and Rawlings brought in their own equipment to get it up and running again.

"You can sense that a lot of records were made in there," Welch says of the place - "Nothing creepy, no ghosts...It's just very alive." "Chet (Atkins) built such a wonderful studio space," she goes on. In Welch's opinion it is "the greatest room of its size anywhere" and "great for small ensemble work."

"We just wanna be in there some more," she says, adding that she and Rawlings do in fact plan to go back into the studio soon.

As head of Acony Records, that's a decision she's free to make. The label, named for a hardy flower (oconee) for which Welch used her own phonetic "folk spelling," is just over a year old. "I guess we got serious about itÉlast summer," Welch explains. She decided to start her own label when her previous label, Almo Sounds, was sold to Interscope, and the prospect of working for a major didn't appeal to her.

"The major labelsÉdon't appear to be a very exciting place to be," she explains.

Welch is able to fund Acony after purchasing, from Almo, the rights to her previous albums. "I was able to get them" from former label head Jerry Moss, Welch says. "He was very gentlemanly about his retirement," she adds as explanation for Moss' generous decision.

Once Almo was sold to Interscope, Welch says, "This was my fear: that if I didn't manage to make my case now...once in that system...they (her songs) would get away forever."

So, she says, "I made a case for being custodian of my own work." "Who would do a better job: Interscope, or me?" Welch asked herself, knowing full well the answer.

Welch is frank about the price she paid for creative freedom. To purchase the rights to her first two albums "was very difficult, financially, for me to pull off," but "that's really what's enabled us to start the label."

Sales of the earlier albums still "putter along" at "400 to 500 per week," providing an adequate financial base from which to build Acony.

Welch credits Moss and Almo for giving her the chance to purchase her songs' rights.

When Moss retired, says Welch, she "mourned the loss of a record man." She is careful to distinguish between "label executives," who make the music industry commercially driven and artistically vapid, and "record men," who care about artist development and creative autonomy, and of whom Moss was, in Welch's view, the last one.

"The record industry is so... conglomerated these days," says Welch, searching for the right word. It's "hard for an artist, even a successful artist" to have stability at a label. It's not just the recording artists who have recoiled from the corporate sting, either. "On every level, there are just people who" - she pauses - "it's not fun for them anymore."

"So, we started our own label and, funnily enough, are working with the same people," Welch says of Acony's staff.

With her own label, Welch feels she has "more security," giving her time to concentrate on making music instead of wondering, like those on major labels might, whether her label is about to be incorporated or dissolved. In those areas of record-making where she has the least experience - publicity and sales - Welch took on other refugees from the major labels. Their competence helped make Welch's first excursion into album-making a "very, very" comfortable process.

Putting together Acony's first release "was quicker becauseÉthere's a much smaller governing body" and because "the chain of command is very short" at the label, says Welch. "We turned in our most economical and our quickest album yet," she remarks.

Although the label doesn't have the marketing budget of a major, there was, in Welch's opinion, "less waste" in publicizing the album.

Time spent in the studio was equally efficient, even though this is Welch's and Rawlings' first self-produced album (T-Bone Burnett produced Welch's previous two). "It was very organic," says Welch. "We've been recording stuff on our own for a number of years."

She adds that three tracks off her previous albums were recorded at home, so "it wasn't completely new territory," and recording the tracks "went very smoothly."

Another one of Welch's "executive decisions" was to release "Time" on vinyl. Its length is enough to qualify it for double-album status, Welch eagerly points out, with a gatefold sleeve and "I Dream a Highway" as "a side unto itself."

This autonomy places Welch and Rawlings in a precarious position: "If the whole thing goes haywire, it's completely our fault," admits Welch, but the encouraging flipside to this is that a successful album is "likewise" all their doing.