ELIZABETH, N.J. - The judge handling the divorce of the nation's first openly gay governor and his estranged wife urged them yesterday to use "common sense" raising their daughter and cautioned against turning the case into a further public spectacle.

Judge Karen Cassidy also called former Gov. James E. McGreevey's sexual orientation insignificant to the case.

"I am just looking at this case with an eye on what is best for the child," she said.

The courtroom session with McGreevey and Dina Matos McGreevey was their first public appearance together since he resigned and told the world he was "a gay American" more than two years ago.

Just before the hearing started, McGreevey approached his wife as she sat between her lawyers and shook her hand. He spoke and she acknowledged him; the encounter lasted a matter of seconds.

At the hearing, which followed a private meeting with lawyers, the judge said the couple had agreed to continue their current visitation arrangements for their only child, 5-year-old Jacqueline.

Matos McGreevey, who sought sole custody, remains the primary parent. The child visits her father every other weekend, and on alternate Wednesdays from 6 p.m. to 8 p.m.

One of the most contentious issues in the divorce is what the child should be exposed to. Matos McGreevey made McGreevey and his partner, Mark O'Donnell, take down a nude photograph in their home, and has contended that Jacqueline should not be allowed to sleep in her father's bed.

The judge said the McGreeveys should "use their common sense and shall not introduce her to any non-age-appropriate activities," a concept Cassidy said was "admittedly vague."

"The court can't be your child's parent," Cassidy said. "I don't want to micromanage your child's life."

However, the judge ruled that the child would not be permitted to sleep in the same bed with any adult except her mother or father. *