Copyright 1991 Times Newspapers Limited The Times March 8, 1991, Friday SECTION: Features LENGTH: 509 words HEADLINE: Musical literacy makes sound sense BYLINE: David Sinclair BODY: Jellyfish: Bellybutton, (Charisma CDCUS 3). 808 State: ex:el, (ZTT 9031-73775-2). Morrissey: 'Kill Uncle', (His Master's Voice CSD 3789). LITTLE is known about Jellyfish. They come from San Francisco, there are four of them, favouring an outlandish, hippie-remnant-shop dress code. Yet far from being the kind of deranged waffle which appearances might suggest, their Bellybutton debut is a l ithe concoction in a musically literate pop tradition that stretches via Squeeze all the way back to the Beatles. As such it belongs in the retro-psychedelic vein of recent albums by Tears For Fears, XTC and Lenny Kravitz. There is a crisp melodic snap to numbers such as ''She Still Loves Him'' and ''That is Why'', while the single ''The King is Half Undressed'' proceeds with an urgent impetus that suggests a band able and impatient to make its mark. While Jellyfish adheres to a strictly conventional notion of harmony singing and rock group instrumentation, Manchester's 808 State represents the dance-trance arm of latterday psychedelia. The group's fourth album, ex:el already has two Top 10 hits to i ts credit''In Yer Face'' and ''Cubik''and is as modern as it is possible to imagine. Multiple layers of clanky, machine-generated percussion are garlanded with buzzy keyboard lines, or startling shrieks and whooshing. Occasional singing is provided by New Order's Bernard Sumner (''Spanish Heart'') and Bjork Gudmundsdottir of the Sugarcub es, whose eccentric wailing pops up on ''Qmart'' and ''Ooops''. Such human touches are, however, purely incidental to the otherwise computer-generated thrust of the Daleks' tea-party soundtracks. This kind of boffin-created dance music often provokes complaints of the can't-write-songs-like-they-used-to variety, but 808 State demonstrate tremendous musical skill in manipulating their rhythms and themes to the exact point where they mesmerise with out being boring. The grand design of ''Nephatiti'', where banks of drum machines engage in chattering dialogue with swarms of blipping synths, has not come about by accident. On the contrary, the dynamic flair with which they harness the awesome potentia l of all this good technology is an example of modern music-making at its most inspiring. There has been a critical backlash against Morrissey. But, while I yield to nobody in my delight at the crumbling away of this tin god's inflated status, it has to be said that there is more to 'Kill Uncle' than meets the eye. It has taken him three years to produce a mere 33 minutes of music, much of it conforming to the familiar pattern of neurotic whimsy with a flatulent title: ''(I'm) The End of the Family Line'', ''There's a Place in Hell for Me and My Friends'' and so f orth. But he taps a deeper vein with ''Asian Rut'' and ''The Harsh Truth of the Camera Eye'', songs with a dark, dramatic flourish worthy even of Marc Almond at his best. ''Found Found Found'', with its pugnacious bass line, is another rare blast. For a moment , it seems as if all the agonising might have been worth it.