it's rare that i find a horror movie that entertains me, if it needs to be horror then i prefer thriller/horror or sci-fi/horror movies that have decent amount of gore but also rely on the tension or the unknown (or the story :p). Event horizon or all Hitchcock movies are great examples. Pure horror movies that basically try to make you scared (the grudge, the ring) get me less entertained.
there aren't much games out there that deliver the scaryness they promis but generally any ID game and bioshock are games that deliver. Farcry wasn't bad either but it depended a bit much on the same thing after a while.
The resident evil series wasn't really my thing, never found it that scary.
One of the most scary things i remeber (i was only like 17 or smth at the time) was in Unreal, where you are in some hangar and there are no mobs whatsoever and suddenly the music picks up (first game that did that) and the lights go black. After a few seconds you start hearing monsters coming closer... man that really got me back then :D

Event Horizon is a fantastic movie that didn't get the appreciation it should have :)

I agree with Clive, as much as I love horror films they just don't scare me. The first game that ever got me scared was Wolfenstein 3D. Most of the boss fights got me nervous in that game expecially the doctor who threw syringes at me lol.

System Shock 2 was the first game that genuinely had me scared. Although there were a few parts in the original Myst... the Electric room comes to mind.

you can't possibly look past the cradle level in thief 3 and I ddidnt see anyone mention it yet.

Hey, finally someone who agrees with me on Event Horizon! ;)

Anyone making a horror nowadays fails at it in the movie industry, take those from the late 70's early 80's for some of the best one made ala The Thing :P

Games work as you are interested throughout when playing them, you're focused entirely on them, the scares then are so much more intense than to watch some film that either bores you or you see the fright parts from miles off.

Best Games for scares is AVP on the pc, randomly placed enemies on the level, Aliens that can move so fast that they are on before you realise there presence, great lighting that helps with the atmosphere and not to mention one tough as hell game with Predators being as tough as they were in the films to kill.And with the sound effects lifted straight from the films for the weapons for a extra feel good factor.

Don't make games like that no more :(