FREDERICK WISEMAN'S documentary "Titicut Follies" was completed in 1967 and had its first major screening at the New York Film Festival later that year. Reviews generally expressed praise for the movie, and horror at the facts it revealed about its subject: living conditions and psychiatric care in the Massachusetts Correctional Institution at Bridgewater, a facility for the criminally insane.Soon afterward the picture was banned from public exhibition by the Massachusetts courts, and despite Mr. Wiseman's growing reputation as one of the leading American documentary filmmakers, has been virtually unseen ever since. Until now. Public showings of the film - which is named after an annual show at the Bridgewater institution, located in the Titicut region of Massachusetts - have finally been authorized by the Superior Court of that state, and it has gone into commercial release. From the beginning, the ostensible reason for banning the film was to protect the privacy of inmates who appear in it. This has always been a questionable rationale, since Wiseman - an attorney as well as a filmmaker - obtained tape-recorded consent from the people he filmed, and agreed in advance not to film anyone incompetent to give such consent. It has been widely assumed that the film was actually banned out of embarrassment at conditions it showed in the Bridgewater facility. These conditions remain horrifying to see, and have apparently changed all too little since the late '60s: Five inmate deaths, including three suicides, reportedly occurred there as recently as 1987, spurring Wiseman to renew his attempts at unshackling the movie. When events as terrible as suicides and untimely deaths enter an equation, it seems trivial to bring something as relatively tame as nudity into the discussion. Yet back in 1967, the depiction of naked men in "Titicut Follies" generated an enormous amount of debate and discussion. The documentary has many naked men, to be sure, and this remains one of its most unsettling aspects. But the nudity has nothing whatever to do with eroticism or even sexuality. Rather, it is visible evidence of an outrageous tactic used by the institution to dehumanize the individuals it controlled. Denied even the fundamental dignity of clothing, these inmates in the film are thereby devalued and humiliated on a minute-to-minute basis, all day, every day. To use "taste" as an excuse for turning our eyes from such a spectacle - or for barring it from our cinema screens - is to dodge something that cries out for correction. Certain medical, psychological, and penological arguments may be cited, of course, to justify such treatment of inmates. In the film we see authorities as they make life-affecting decisions, and the sight is not reassuring. When drugs are prescribed with cavalier ease, for instance, it's hard to escape the suspicion that controlling a patient's behavior has priority over improving his long-term mental health. One of Wiseman's most radical and ingenious devices is to dub a pop-music recording over the sound track of the film, mimicking the sort of omnipresent media-noise that one inmate poignantly complains of as a major irritant to his psychological well-being. The music eventually drives you crazy even when you're sitting in a comfortable movie theater - and you're forced to consider its implication for people unwillingly exposed to it steadily, constantly, incessantly. Wiseman isn't always a muckraking sort of moviemaker. He knows how to portray an institution that's doing a good job - the brilliant "Juvenile Court" is an example - and often he doesn't take a polemical stand at all, as in his "Meat" and "Essene," which deal with a cattle ranch and a monastery, respectively. But the brilliant "Titicut Follies" is muckraking at its socially alert and aesthetic best. It's also as relevant as a film can be - focusing thought not only on problems of incarceration, but on more sweeping questions of how to care for the dispossessed and downtrodden human beings who are an ever-more-visible part of the landscape.