"We can compete with big-box stores in downtown because they're apples and oranges," Bethel said. "We don't have the ambiance of Vermont out on the strip. You have the ambiance of Vermont downtown."

Plenty of others agreed, giving Wal-Mart a win yesterday in a vote on whether to cap the size of big-box retailers to 75,000 square feet — an attempt to halt an expansion of the local Wal-Mart store. The bylaw, enacted in December, was expected to produce a closer vote — but the cap was rejected by a vote of 2,189-1,724.

The victory for Wal-Mart, which wants to increase its Bennington store to 112,000 square feet, came after heavy advertising by the site's developer, Ohio-based Redstone Investments.

Ten years ago, the Arkansas-based retailer opened its first of what are now four Vermont stores. Now, Bennington is being watched closely in Montpelier, where state lawmakers are considering a bill that would cap retailers at 50,000 square feet.

Bennington's debate may seem quaint in some parts of the country. In California, the question in several cities is whether to allow Wal-Mart Stores Inc. to build what it calls Supercenters at 200,000 square feet. That's more than four football fields of retail space.

But, in 1993, two years before the Bennington Wal-Mart opened, the National Trust For Historic Preservation put the entire state of Vermont on its list of the "10 most endangered places," proclaiming the state was endangered by a phenomenon it called "Sprawl-Mart."

Vermont made the list again last year when the National Trust said its "special magic" of historic villages and bucolic countryside faced "an invasion of behemoth stores that could destroy much of what makes Vermont Vermont."

Bruce Laumeister saw the photo-finishing business he founded more than two decades ago in Bennington grow to 26 stores in four New England states and then shrink to 15, mainly due to cut-rate competition from big-box retailers.

Eventually, he had to close what had been his biggest store, in Keene, N.H.

Wal-Mart has come under scrutiny for its effects on everything from its labor practices to the health of other businesses in town and the traffic its stores generate. Last month, the company agreed to pay a record $11 million to settle federal allegations it used hundreds of illegal immigrants to clean the floors at its stores in 21 states.

Wal-Mart has had some success in California and elsewhere defeating local officials' efforts to limit its size by putting the issue to a referendum.

Meanwhile, in Vermont, people on both sides of the debate insist it's not just about Wal-Mart. "It's about the character of Bennington," Town Manager Stuart Hurd said.