It is an impossible arena - a tumbling cascade of concrete, veined with thin, corkscrewing streets and alleyways which week in, week out are witness only to the refined, hushed progress of barge-like Bentleys or housetrained Jaguars.

But each year, for just three days, those reed-thin veins pulse to a different, more adrenalin-soaked beat. This weekend, for the amusement of the idle rich in ivory towers and for the amazement of the merely curious, the circus comes to town. The arena is Monaco, the circus is Formula One.

The Monaco Grand Prix is, in some ways, the ultimate triumph of style over content. It's the slowest race on the calendar, where the average speed drops to under 90 miles per hour, where the streets are so narrow that overtaking is nigh on impossible and where performing in qualifying is often more important than performing in the race.

But, like the marriage of an autocratic head of state to a Hollywood princess, Formula One's annual love affair with the tiny principality is the perfect union of cold machinery and uptown glitz. The sport's star quality reaches its apogee here. All motor racing's supposed glamour, its mystique of cars and girls, money and cigarettes, is encapsulated in a weekend-long blitz from the Rascasse to the Sainte Devote, from Loews Hotel to the Swimming Pool and so on.

The racing equivalent of the monarchy that controls the streetscape, this is a 78-lap anachronism. The race has been run 56 times since 1929 and its landscape has remained virtually unchanged since Juan Manuel Fangio won the first Monaco Grand Prix of the world championship proper in 1950. As every other race in the championship is beaten into a flat homogenised dish allowing little thrill and less spectacle, Monaco remains resolutely antediluvian.

At other circuits, both drivers and the FIA, the sport's governing body push for wider run-off areas, safer crash barriers, more protection. In Monaco, geography silences those demands. The track is a streetscape; the run-off areas are armcos bolted to walls, sidewalks and buildings; the corners are dipping switchbacks and first-gear turns enforced by the fact that the cars race alongside the sea.

But the anachronism works. For the sport, it is a hideous godsend. As Monaco refuses to conform to the notions of safety and security, so it also refuses to entertain any ideas of practicality. The pitlane is little better than an alleyway, wide enough, once the temporary garages have been built on one side and the pit wall erected on the other, to barely admit one car.

Even the temporary nature of the garages causes problems. They are so shallow that much of the equipment cannot be stored inside or must be part assembled and left outside, locked up and away from the greedy hands of souvenir hunters who can patrol the area unchecked. "Years ago the only race you'd go to where there would be garages was in America at Watkin's Glen," said McLaren boss Ron Dennis earlier this week. "Now, Monaco is the only place you go where there are no garages. At least they're only temporary ones. It's logistically very challenging. You're disconnected from your spares and a lot of them have to be put into assembly configuration so you can quickly get at them if a car gets damaged which happens a lot here."

But if the teams secretly loathe the difficulties the circuit forces upon them it does possess other charms, even if they are of a slightly tawdry nature. For a sport so utterly reliant on massive corporate sponsorship, Monaco is the ultimate advertising campaign - a billion dollar billboard by the bay.

Monte Carlo is where, each year, the corporation chiefs are entertained, where next year's deals are sealed in a wide-eyed parade of playboy fantasies. A guided tour of a race through the winding streets of the jetset's playground is more than enough to bedazzle even the most jaded corporate eye.

Jordan Grand Prix, never a team to shy away from lavish courtship of potential backers, will this year entertain over 200 guests on a fleet of yachts moored in the city's picture postcard harbour. "Monte Carlo remains a very special place for the corporate guest," says Jordan's head of marketing, Mark Gallagher. "Although we don't have our maximum number of guests here, the seniority of those attending is extremely high. This is the race all the chairmen and chief executives want to come to. It's still the Monaco Grand Prix which epitomises the glamour and excitement of Formula One."

But while the corporate guests may still balk at the notion of spending the odd million just to get wined and dined by a team in Monaco, the heady cocktail of speed and greed can always be sweetened with the froth of celebrity endorsement.

With the race coinciding with the Cannes Film Festival, less than an hour down the coast, grand prix weekend will always feature a motley crew of Hollywood high fliers and hangers on prowling from Paddock Club to pits in search of photo opportunities at the invitation of one team or another. Last year, it was Sylvester Stallone, bumbling around the paddock in the course of "research" for a Formula One film due to begin shooting later this summer at the Hungaroring.

It was also the year of Liz Hurley and Hugh Grant, strolling arm in arm down the start/finish straight, the Estee Lauder cover girl declaring her support for "the Irishman" at Ferrari for no other reason than he had nice eyes.

But even as the glamour threatens to throttle the throttles, somewhere in the midst of the superstar hoopla a race still manages to get run and still manages to enthral and delight. Indeed, it is precisely the combination of glamour in peril that makes Monaco such a unique race. The grand prix may now feature cars too powerful to negotiate its winding curves and streets too awkward to allow those cars to pass each other, but its mythic qualities linger. Not least among the drivers themselves. "It is a unique place," says Michael Schumacher, three times a winner around the streets and one of a number of drivers who maintain a home in the city. "There is tremendous satisfaction about going so tight through the barriers, just missing them, just getting it right. It is incredibly demanding but also fantastic. It's always great to race here, but I'm glad it's only once a year."

"It's the biggest challenge in the calendar," says Heinz Harald Frentzen.

While it's unsurprising that the drivers get caught up in the mythology, team managers would be expected to take a more no-nonsense view, but even the arch-pragmatist Ron Dennis is swayed.

"It's the most difficult, psychologically challenging race for a driver. When you think about the elements to cope with, the tunnel vision, the speed at which things appear to happen, the closeness of the armco, the difference in light even, as you go in and out of the tunnel. If I was a driver, I'd want to be here."

With every racing fan and rock star, millionaire and minion trying to cram onto the streets of Formula One's crown jewel, Ron Dennis isn't alone in that wish.