  Liquid crystals in two dimensions undergo a first-order
isotropic-to-quasi-nematic transition, provided the particle interactions are
sufficiently ``sharp and narrow''. This implies phase coexistence between
isotropic and quasi-nematic domains, separated by interfaces. The corresponding
line tension is determined, and shown to be very small, giving rise to strong
interface fluctuations. When the interactions are no longer ``sharp and
narrow'', the transition becomes continuous, with non-universal critical
behavior obeying hyperscaling, and approximately resembling the two-dimensional
Potts model.
