(FORTUNE Magazine) – When your only business objective is to create cars with world-class power and drop-dead looks, life is, as they say, beautiful. But when you also have to consistently outperform your previous works of art (not to mention the ever-growing field of high-quality competitors), suddenly la dolce vita seems a little harder to hang on to. And so it was for Ferrari when the time came to redo its $131,000 entry-level two-seater, the V-8-powered F355. Since 1994 the F355 has sold better than any other Ferrari in history, and with reliability up and sales strong, it must have felt crazy to fix what wasn't broken. "We have to always stay ahead," says the company's intense chairman, Luca Di Montezemolo. "The 360 Modena is the first Ferrari of the new millennium, and we have put everything we know about innovation, acceleration, braking, and drivability into it."

He's not lying: The 360 is, among other things, faster, lighter, roomier, easier to handle, and more aerodynamic than its predecessor--and most of the competition. It is also more beautiful, thanks to a staggeringly sexy Pininfarina design. Its loins are crafted by high-speed wind (5,400 hours of it in Ferrari's wind tunnel), its 400-horsepower innards breathe torque-laden fire, and its engine shrieks with the passion of an exotic mating call. The 360 Modena is alive, and it is beckoning to you.

At least it was screaming my name when I sidled up to its lusty all-aluminum haunches at Ferrari's testing grounds in Maranello, Italy. The car is no wallflower: It's like a dangerously attractive ____ (fill in your favorite gender) walking down a big beach in a little bathing suit. All heads turn; every angle is noted. And not unlike a superlooker, the 360 is vaguely intimidating; its presence spells nothing but head-over-heels trouble.

When I climbed in, the sensation of serious sensuousness only increased. Body-hugging seats, hand-stitched leather, brushed-aluminum details--it is the haute couture version of a racecar. I noticed that the speedometer arches up to 220 miles per hour--but because of the steering wheel's position, only the portion measuring from about 85 mph to 220 mph was unobstructed. Message received, loud and clear: Don't flirt with this car--commit.

When I started to drive up into the surrounding mountainside, it all fell into place. Yes, the 360 is ready, willing, and more than able to take you up to warp speed, but perhaps for the first time ever, this Ferrari will do so in whatever style you require. Ferrari's team struggled to make using the car a more civilized, less leg-cramping exercise--and it succeeded. For the first time, there's a real front trunk and a smidgen of space behind the two seats, just enough for Ferrari's specially designed $1,490 golf bag.

If performance is what you're after, Ferrari's second-generation F1 gearbox is as close to perfection as I've found. Taken straight from Michael Schumacher's cockpit, the F1 system allows you to flick superbly easy-to-use little paddles on each side of the steering wheel to upshift and downshift with a finger. It's as fast as a videogame: click, click, click up the hill; click, click, click down--instantly!--when an unsuspecting dog wanders onto the road ahead. (Luckily, the brakes work too.) In high-testosterone sport mode, the system even matches the engine's revs on the downshift for you by aggressively hitting the gas (oh, what a sound!). Yet for those occasions when you want to drive like a chauffeur, easing up to speed in the least passenger-rocking way possible, the buttery-smooth automatic setting is there. Traditional metal gateshifts look cool, but the paddle system renders them all but obsolete.

As I screeched past bucolic Italian countryside, I kept looking in the rear-view mirror and catching the most extraordinary sight: the engine. The 360 is so sure you want to check out its power plant that from the driver's seat, a glass window is all that stands between you and all eight pounding red cylinders. Better still, a permanent glass rear hatch exposes that snarling, monstrous engine to the rest of the envious world. Why hide your best feature?

During my morning tour of terror (the locals', not mine), I pushed the car as far as I could on open roads. Unfortunately, that meant that I barely tapped its abilities. It gamely hung in there with me, delighting me with its shrieks, thrilling me with its personality (there is no unexciting moment in this car, even standing still), and one-upping me with its prowess. "You want to shake the back end, do you?" the 360 seemed to taunt me. "Okay--take that!" And close to the road's edge we'd slide, the car miraculously gripping just when I started to calculate the number of hundreds of feet of drop-off (and dollars of repair) I'd have to contend with.

After one escapade too many, a bit of rubble worked its way into the right rear tire. The sluggish thumping of a flat forced me to the side of the road. I phoned for assistance, and after an hour's wait a Fiat pulled up and two red-suited Ferrari mechanics jumped out and did a marvelous imitation of an F1 pit-stop tire change. Within minutes I was off again, revving the engine up to its 8,500-rpm limit. I'm not proud to admit that I had become a junkie in need of another fix.

"What did you do to my tire, Sue?" asked Montezemolo upon my return to the track (yo, thanks for telling him, guys). We were there for perhaps the high point of the day: computer-monitored laps. Unfortunately, the clouds I swirled through in the mountains were now dumping sheets of rain on the circuit. I looked at the drenched asphalt, took a deep breath, and strapped in.

Whaaaaaaaa! The engine screamed to life, and I was off. Despite the downpour, the 360 held on admirably, although sliding quickly became a way of life. Knowing the computers were running, I dug into the gas pedal and could feel what the engineers had told me: The car has four times the downforce of the F355. After a few hair-raising laps, I pitted and waited for my printout. I was just a few seconds off Schumacher's best lap in the 360--not bad for a rainy day (or a girl).

My advice? Sure, you can buy two Porsche 911s for the price of one 360. Or you can wait for BMW to come out with its Z8 supercar. But the truth is, when Ferrari does something as right as this, there may be no purer sports car experience.

Of course, with a $150,000 price tag, such a luscious package is unaffordable for 99.9% of the population, so don't go anywhere near it. It'll only break your heart and ruin forever whatever slim pleasure you get from what you're driving now.