Marc has no use for her, as he is wed to his understandably jealous assistant Rosalie (Zsa-Zsa Gabor). After some floundering, Lili ends up as a cast after type actress in a puppet show performed by Paul (Mel Ferrer). Paul was a promising athlete crippled by a World War II injury, and now he is embittered. He falls in love with Lili, but believes she cannot love him back because of his injury. So, he treats her poorly, yet she adores his considerably more gentle puppet show characters.
Lili is incorruptible but not especially bright, and has trouble reconciling Paul's hostile exterior with the charming personalities he exhibits via his puppets. Finally, Lili can take no more and abandons the circus, just when the puppet show receives its big break from two famous theatrical agents (Wilton Graff and George Baxter). But don't worry, the film is a crowd pleaser and has a happy romantic ending.
How others will see it. Something of a box office sleeper, Lili was nominated for several Academy Awards, and remains well regarded today. Per the imdb user ratings, women like the movie more than do men, not incomprehensible given that the male lead is a puppeteer and former dancer. Leslie Caron is attractive but rarely sexy.
How I felt about it. The acting career of former dancer Leslie Caron flourished between 1951 and 1966. Typically, she played a waif on the cusp of womanhood, the love object of an older man (or two). Best known for Best Picture winner An American in Paris, she reached the pinnacle seven years later in Gigi (1958), where the 27-year-old again played a character of about 17. Gigi won nine Oscars, in every category in which it was nominated. By the the time she made The L-shaped Room (1962), Caron's character was at least old enough to be in need of an abortion.
Lili is almost certainly Caron's best movie, despite the fact it lacked the budget and slickness of her most famous 1950s MGM musicals. The humility of her character had much to do with the film's success. She was unremarkable aside from her purity, which captivates Paul. His chemistry with her in the puppet shows is a direct result of his longing for her. He knows no other way to communicate with her. Certainly, he can't have a mere simple conversation with her, because the elephants in the room are his love for her and its incompatibility (from his pained perspective) with his war injury. The puppets provide the sole outlet for his inner personality, completely different from his brooding public face. Her infatuation with magician Marc only aggravates matters, since he can never match his easy-going and flamboyant manner.
Psychologically, Lili is interesting. Lili and Paul belong together, because they are practically nothing without each other, yet a powerful team together. Lili inspires Paul through his puppets, which in turn give her life purpose. She is the "straight man" in their act. If they get married, though, he had better take his hand puppets to bed with him, or they'll never be able to communicate, much less consummate.