Throughout his 40 year career as New York City's preeminent filmmaker, Woody Allen has worked with a rotating cast of actors, cinematographers and producers. One thing that hasn't changed, however, is the way he writes his scripts.

"I still lie down on the bed and write the screenplay by hand on a yellow pad," says the legendary writer-director, who will turn 70 in December. "I can write faster that way. I was taught on a typewriter and it would probably be healthier for me to do it that way. Invariably, I have to type the scripts myself when I finish writing them, and that takes three days. But it goes so much faster when you write on a pad; you can hear the dialogue in your head."

Allen's latest film, Melinda and Melinda, currently in limited release, grew out of an idea he'd been bouncing around inside his head for years. The movie presents one story told in two different ways — once as a drama and again as a comedy.

"There are many times where I've had story ideas that I felt would work as a serious story or as a funny, romantic story," he explains. "Here, I had an idea that I thought could go either way. Then it occurred to me: 'Why don't I alternate the two and maybe learn something from it?'

"Of course," he adds, laughing, "I learned nothing from doing the movie this way. It was fun to do, but it wasn't enlightening to me."

Allen knew early on that he wouldn't be acting in Melinda and Melinda, so the search began for an actor who would play the "Woody" character in the comic segment. Eventually, Allen settled on Saturday Night Live vet and current Hollywood favorite Will Ferrell.

"He's so physically different from me," says Allen. "He's a big, silly person, so the question was, could he act and be believable? As it turned out, there's something really sweet about him. Still, there were things in the script — certain lines of dialogue, for example — that he couldn't do, and so I had to rewrite those parts to suit him."

While Allen declines to offer specific examples of lines that were cut, he describes them as "one-liners that don't sound like jokes. When I do those lines, they sound like dialogue, but they didn't come as easily to Will. I've had that problem before with, believe it or not, Diane Keaton. She's the funniest person I've ever met, but I would write these sharp remarks for her and she could never do them. She always used to steal the picture from me anyway. I wrote the movie for me and then it would come out and she would be the star!"

Ferrell is the latest big-name actor to appear in one of Allen's movies. Since the early '90s, the director has been able to lure such A-list stars as John Cusack, Julia Roberts and Sean Penn to act for little money and fewer perks (you won't find any two-story trailers on a Woody Allen set).

"Stars only want to work with me if they are between desirable jobs," Allen remarks honestly. "If I call an actor or actress and Steven Spielberg or Martin Scorsese are also calling them, they have no interest in me at all. But if they just finished a big picture and earned their $10 million salary and have nothing to do until August, they say, 'Why not?'

"I do wish that I had $100 million budgets to work with," he continues. "I'm making films where everything is a maximum of $15 million and it's very hard because there are a lot of things I can't do. On my next film, Match Point, they said to me upfront, 'You're not going to be able to afford music.' I eventually figured out a way to get music by using an all-opera soundtrack, but it was still very difficult. I also can't do any special effects and there's not much time to do reshoots. So if I had more money, I'd definitely use it."

Match Point, which stars current It Girl Scarlett Johansson (who replaced the original star, Kate Winslet) as well as Brian Cox and Jonathan Rhys-Meyers, will premiere at the Cannes Film Festival in May and go into general release later this year. Shot entirely in London, it's the first Allen film in quite some time that doesn't take place in New York.

"I got a deal that worked out well for me," Allen says about his decision to make the movie abroad. "I got the money with no questions asked and the atmosphere was wonderful. We shot over the summer, when it was cool in London and the skies were all gray, which is great for photography. And there were no unions! That's a great thing, not only financially, but because everyone could help out and do another person's job without infringing. It's like making a student film in the best sense of the word — the guy who does the lunches can also stop traffic."