The first thing I noticed about my neighbour was that he had to build a new house: he hadn't inherited the sumptuous country retreat of his predecessor, Boris Yeltsin. That was because the deal between Russia's crooks and spooks that brought Mr Putin, then an unknown and undistinguished bureaucrat, to power in 2000 included an iron-clad agreement that the outgoing Yeltsin clan would not just be immune from prosecution, but also keep the spoils of officecash, cars and country cottages.
Secondly, the Putin "dacha" or "cottage" (it was about the size of Sandringham) was built at amazing speed and great secrecy on a disused airfield at the edge of our village. That infuriated my sons, who were learning to ride bicycles there. It also illustrated an important point about the way the Russian state works. It may be corrupt, lethargic, and stunningly incompetent in general. But when the man at the top wants something done, it happens fast and ruthlessly.
Our Russian neighbours in the village were unhappy at the rush of development that followed Mr Putin's arrival. One new rich neighbour with close Kremlin connections concreted over the village green to make a driveway for his mansion, beating up an elderly neighbour who objected. Then a property company, also with Kremlin links started bulldozing a nearby forest for a housing development. That taught us two lessons about Mr Putin's Russia. It was startlingly encouraging to see the effects of ten years of democracy: the villagers reacted not with traditional Russian apathy, but with lawsuits, petitions, and when all else failed, direct action: they blocked Mr Putin's road to work. The sad lesson was that the legal system brushed them aside; that their petitions were ignored, and that their modest demonstration met with a tough Soviet-style response from the authorities. The developers and their mates in officialdom offered cash and - bizarrely and for reasons I never understood - fridges to those locals willing to join a rival outfit set up to campaign for the new housing development and denounce the protestors as anarchists, greens and communists. Setting up fake front organisations was a classic Soviet-era tactic. So was bullying opponents. The villagers received blunt threats: "we will turn up with a bit of paper saying your house is built on our land, and then we will bulldoze it" a shadowy official told my next-door neighbour.
Such are the paradoxes of Putin's Russia. There is prosperity amid lawlessness. The outward trappings of democracy decorate an increasingly authoritarian system. Imperial pomp and ceremony surround a modest-seeming man from a humble background. But the biggest puzzle is that what the all-powerful Mr Putin really wants, believes and can do is still a mystery to Russians, as it is to the former captive nations of eastern Europe, and to the rest of the world. Sometimes it seems a mystery to Mr Putin too. Certainly when he was first nominated by Mr Yeltsin as designated successor, he seemed as baffled as everyone else. "I am obeying orders," he told journalists wryly in the summer of 1999 when he first emerged, blinking and tongue-tied, into the world's view. Mr Yeltsin, the bearlike destroyer of Soviet communism, was by then so confused and erratic in his rule that few people thought his choice of successor would mean much. Mr Putin, a dull, publicity-shy bureaucrat with not an ounce of charisma, and the fifth prime minister in 18 months, would surely be swept aside by some bouncier character, such as the rumbustious wheeler-dealer mayor of Moscow, Yuri Luzhkov. Yet the provincial Mr Putin, a second-rate spy turned local-government official, moved seamlessly into the top job, and now presides over the world's largest country, over its second-biggest nuclear arsenal, and over its most strategically important gas reserves.
To everyone's surprise, he rapidly became very popular. For the public, he was sober, young and athletic - everything that Mr Yeltsin wasn't. And for the Russian elite, he was the ideal compromise.
The spooks, longing to restore Russia's great-power status, liked him because of his intelligence background: not quite the top drawer, perhaps, but certainly part of the charmed circle that had studied at the Red Banner Institute, the top Soviet spy-school.
And he was palatable for the crooks. These were the sharpwitted shysters who had run black-market businesses during the late Soviet era, and had gone on to grab amazingly lucrative stakes in the free-for-all that followed over who would control Russia's natural wealth, and exploit the huge opportunities that capitalism created in banking, transport and property. Having served as a trusted official in the Kremlin, Mr Putin knew the way that wealth and power in Russia overlapped. Mr Yeltsin's highly influential daughter, Tatyana Dyachenko, and her husband Valentin Yumashev, the two figures in the Kremlin that epitomised the reckless greed of 1990s Russia in their blurred roles as high officials and highly successful businesspeople, were solidly behind the new man.
So at the beginning, many people hoped that Mr Putin would be a magician-president who would kick-start reforms and drag Russia into the modern world. Even democratic-minded Russians who loathed the KGB and everything it stood for wanted to give the new man a chance. And for a time it looked good: he cracked down on the "oligarchs"the arrogant, lawless tycoons who had looted Russia in the 1990s. True, that meant closing down their once-flourishing media empires, all of which are now run by tame businessmen close to the Kremlin. But that seemed defensible. Independent television is one thing; pocket stations that blatantly serve the commercial interests of their owners are hardly an ornament to democracy. Mr Putin might have a steely manner, but he spoke nice words. He praised democracy and civil society.
Many outsiders were prepared to give Mr Putin the benefit of the doubt too. George Bush said that he had looked into the Russian president's eyes and "seen his soul". Tony Blair enjoyed lavish nights at the opera during visits to Russia. Gerhard Schroeder got on so well with the German-speaking Putins that they spent a family Christmas together; Mr Putin intervened personally to help Mr Schroeder bend the rules and adopt a Russian orphan.
The first doubts appeared over Mr Putin's effectiveness. It was increasingly clear that he wasn't a magician: The growth in the Russian economy owed everything to high prices for oil and gas, and almost nothing to the half-hearted, half-baked reforms coming out of the Kremlin. Many began to think Russian president was a mouse, an over-promoted minor spook who spent his days obsessively reading intelligence reports, but was ignorant of the big picture, and lacking the drive and vision needed to run a country as huge and troubled as Russia. Mr Putin might be good at appearing on television, in elaborately choreographed stuntsflying a fighter plane, whizzing down ski slopes, hurling opponents across a judo mat. He certainly seemed to enjoy themwhat a contrast to his humble origins as a scrawny, bullied youngster from a hard-up family living in a rundown communal apartment in Soviet Leningrad. But many felt that real power surely lay elsewhere, with the sleazy, wily old-timers inherited from the Yeltsin era.
Certainly Mr Putin's public utterances, or the lack of them, were often mystifying in their quality and quantity. At times of crisis, such as terrorist attacks by Chechen rebelsthe direct result, many say, of his regime's brutal policy of reprisals in that breakaway republiche simply vanishes from public view. When he does speak in public, his remarks have seemed at times astonishingly callous and ill-judged. Asked on live television about the Kursk tragedy, in which 118 Russian submariners perished, Mr Putin shrugged and smirked: "it sank". Speaking about Chechen rebels, he resorted to slang normally heard only in the mouths of gangsters, which could be loosely translated as "if we find them in the shit-house, we'll whack'em in the shit-house". Criticised at a press conference in Brussels for his harsh policies in Chechnya, he suggested that the offending journalist should undergo ritual castration at the hands of Muslim extremists. At a joint press conference with Mr Blair, he could not resist the temptation to humiliate the British Prime Minister about the absence of weapons of mass destruction in Iraq. "Maybe they're here, under this desk" he sneered. Mr Blair has never trusted him again.
What is really scary about Mr Putin is that despite his undistinguished record in office, his limited intellectual and cultural horizons, and his bullying manner, he has still been able to turn the tables on the people who put him in power. Russia may still be shambolic, but it is a shambles over which he and his team of Kremlin loyalists, mostly from the old KGB, is in undisputed charge. Everyone who has dared challenge or resist Mr Putin's rule has been sidelined, neutralised or humiliated. The Yeltsin advisers are gone. The tycoons are in jail, in exile, or in political purdah. The media is cowed. The opposition parties are shams, run to give the appearance of pluralism to the Russian public and the outside world, but with no chance of taking real power. The once-mighty regional chieftains like Mintimir Shaimiyev of Tatarstan and Yuri Luzhkov of Moscow, who used to run Russias's cities and regions as private fiefs are now, like the central government itself, merely nervous servants who carry out the presidential administration's commands as their predecessors once obeyed the Communist Party of the Soviet Union.
That is thanks to the way the Russian state works. There is huge power for the man at the top, regardless of whether he is impressive or not. Lenin, Brezhnev, Andropov and Yeltsin all ruled for years as sick men. Mr Putin is the first Russian leader since Peter the Great to have the simple advantages of being punctual, efficient, fit, sober and concise.
Mr Putin's KGB background adds both useful skills, and an aura of intimidating mystery. Even Russians who hated and feared the Soviet secret police have grudging respect for it. It was an organisation that recruited the brightest and toughest people in the country, and gave them excellent training. All KGB officers are trained in target acquisition: gaining a target's cooperation through bribes, flattery or threatsand then bending them to your will. Some joke that Mr Putin's relationship with Mr Schroder is a public example of this.
Privately, Mr Putin seems to enjoy showing off the fruits of his spy networks and their dungeons packed with information. A western newspaper editor who met him was amazed when the Russian leader murmured at the start of the interview, in English, "I hope your wife's mother recovers soon." Not even the editor's closest colleagues knew that his mother-in-law was gravely ill.
Mr Putin also understands the way that corruption both fuels Russia and makes it manageable. When the rules are impossible to observe, everyone is vulnerable. It requires only a phone call from the top and the tax police, special anti-corruption police, anti-racketeering squad and all manner of other menacing, implacable monsters descend on an uncooperative individual, company and organisations. Even the honest cannot hope to escape the government inspectors: they will always find something. Such arbitrary rule is inefficientbut Russia's oil and gas wealth makes it affordable.
In short: Mr Putin is neither a magician, nor a mouse. But he increasingly looks like a monster. He has unleashed the two most sinister forces of the Soviet past: the totalitarian habits of the security services, and the imperialist urge that lies deep in the Russian psyche. Put politely, he wants the Russian state to be strong at home and abroad. Put crudely, he is trying to recreate an empire reminiscent of the Soviet Union: feared by its own people and its neighbours in equal measure.
The big question now for Russia and the world is what happens next.
The bullying of the former captive nations seems set to continue: the latest spat about gas has illustrated that rich Europe is unwilling or unable to protect the east European countries that are captives of the Russian gas monopoly. The slide away from democracy is continuing too. Here 2008 will be decisive, when, according to the Russian constitution, Mr Putin should step down as his second term in office ends. Few believe that he, like his predecessor Boris Yeltsin, will step gracefully away from power in return for immunity against prosecution for him and his family. Some smart money bets that he will leave a puppet figure in the Kremlin, and move over to Gazprom, the hugely powerful Russian gas monopoly. Others think he will change the constitution. Or he may create a new country, a union of Russia and Belarus, and become president of that.
But one thing is clear and scary. The world may still know very little about the prickly little ex-spy who now runs Russia. But it is going to be hearing about him for a long time to come.