(FORTUNE Magazine) – Nothing shouts "new money" quite as loud as a large, expensive power yacht. At least that's what the blue-blood sailors in New England's snootiest harbors often used to say. But six years ago Hinckley, renowned sailboat builders on Mount Desert Island, off the Maine coast, began building a 36-foot powerboat that any Muffy or Kip would be proud to moor at the family's gray-shingled, gin-soaked summer place. Its very name, the Picnic Boat, bespoke the region's fanaticism for understatement, making a jet-powered $400,000 yacht sound almost quaint. Its cachet was assured when Martha Stewart bought one and had it painted to match one of her hens' eggs. Within a few years Hinckley was producing many more Picnic Boats (30 to 35 annually) than the sailboats (four to six) on which its reputation was made.

Now Hinckley has introduced the Picnic Boat's stately sibling, the $1 million Talaria 44. Where the Picnic Boat succeeded as a lean day boat with snug overnight quarters for two, the 44-foot Talaria is a spacious cruiser on which two couples can happily spend a week. Fourteen have been delivered, another seven are under construction, and the next 17 have already been presold.

Like the Picnic Boat, the Talaria owes its success to a melding of new technologies with old-school styling. It's a fusion emblematic of Hinckley yachts: Originally a builder of wooden sailboats, the company was quick to embrace fiberglass in the 1950s. Since then its timeless sailboats have been constructed with modern methods but finished with finely crafted joinery reminiscent of earlier eras. "There's a majesty to them," says Disney President and COO Robert Iger, who owns a 52-foot Hinckley sailboat (his third). "You can see they take pride in their work. I store my boat with them in winter, and each year they return it as new to me. The people there spend time with me--they're teachers as well as builders. I don't know if I've experienced anything else as a consumer where there's that kind of relationship with the manufacturer."

Like many sailors, Iger scoffs at the notion of motors. (His first words on the subject are, "Powerboats? Boo.") But he concedes that Hinckley's push into the powerboat market "has not contaminated its love for sailing," and he points out that powerboats are crucial to the company's financial health.

Nearly 16 times as many powerboats as sailboats were sold in 1999, according to the National Marine Manufacturers Association. Though the people at Hinckley understood the numbers, they didn't anticipate the sensation their new boats would create, a sensation fueled largely by Hinckley's unprecedented mastery of jet-propulsion systems.

Jet pumps had been used for years on commercial and military vessels but were rarely employed on recreational boats (other than on personal watercraft, like Jet Skis) because of their skittish handling and sluggish performance at low speeds. Hinckley, however, developed a construction process that shaves enough pounds off the hull to make the jets perform nimbly. The addition of a joystick steering mechanism makes the Picnic Boats easy and fun to drive.

The JetStick has also been installed in the Talaria, along with a second engine and jet drive. The result: a twin-jet yacht that an inexperienced buyer can master in a few days, with little--or none, one might hope--of the dock-crunching humiliation that many novice captains experience.

That's a good thing, since it would be a bummer to bruise the good bones of Talaria's Bruce King-designed hull. Specifically, the design refers to Maine's venerable lobster boats, which are often converted to pleasure craft known as "lobster yachts." Glitzier powerboats might be deemed "stinkpots" by sailing elitists, but lobster yachts are accepted more readily thanks to their work-boat ancestry.

The appeal of a high-tech jet boat in lobster-boat drag hasn't gone unnoticed by other builders, who've begun placing jet drives in their own lobster-boat hulls, hoping for a piece of Hinckley's action. But without drastically trimming a hull's weight, as Hinckley has, the jets don't always fare well.

That said, Hinckley's supremacy in the jet-boat market is no sure thing. On the other side of the country, Santa Cruz Yachts is building a 40-foot jet boat called the Coastal Flyer (from $450,000) that promises to give Hinckley a run for its money. Five hulls have been sold, with the first expected to hit the water this fall.

Like Hinckley, Santa Cruz Yachts made a reputation building sailboats. The company is known for ultralight racers that set records in TransPac contests from L.A. to Honolulu. Its expertise in lightweight construction should serve the Coastal Flyer well, and it's the only builder besides Hinckley to have created a joystick system for its jet boat. But where other new entries into the market have mimicked Hinckley's lobster-boat styling, naval architect Dave Gerr has given the Coastal Flyer a sleek, efficient hull modeled after 1930s commuter launches--the art deco runabouts that tycoons used to travel from waterfront estates to their downtown offices. With a jaunty reverse sheer and a rumble seat built into the bow, it looks more comfortable than the Talaria in proclaiming itself a rich person's plaything.

The Talaria 44 and the Coastal Flyer might convey different stylistic messages, but they're still two of a kind. Each cloaks modern technology in nostalgia, and each is the product of a builder's decision to trade on a reputation as a fine sailboat maker in the lucrative powerboat market.

Powerboating is easy, and sailing is complicated. It's a distinction so universally accepted that it's even described in the '70s The Cosmo Girl's Guide to the New Etiquette: "On a sailboat you will have to help sail the thing, which can be strenuous at times, or keep out of the way of those who are sailing it, which can be even more strenuous. On a powerboat, you can expect to spend a great portion of your time sitting on a deck with a drink in your hand and looking pretty."

Ironically, our finest sailboat makers are now the ones to make sitting pretty in a powerboat more appealing than ever.

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