From Times Square sing-alongs of ''With a Little Help From My Friends'' to commemorative Fab Four wall plaques hawked on cable-TV shopping programs, it's hard to escape the Sgt. Pepper's anniversary. As for the avant-garde approach to the Beatles taken by musicians appearing Live at the Knitting Factory in New York, outside of a few mild diversions (Lydia Lunch screaming her way through ''Why Don't We Do It in the Road,'' Samm Bennett and Chunk's back-to-the-future psychedelic take on ''Dear Prudence''), let's just say they give new meaning to the term terminally hip. C-
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