Caught this one on Sundance the other afternoon after work purely by chance. I'm not a very big 'horror' fan, and I'm sure this would disappoint the 'blood and guts' crowd. I like a movie that can get under your skin with a suggestion of terror rather than the full fledged hatchet to the forehead. Creepy and atmospheric, with some great soundtrack music and sound effects which squeezes a lot of mileage out of a drippy spot on the ceiling and a child's little red plastic purse.
I haven't seen the remake that came out this past summer, but I heard it was pretty soggy (don't you love movies that write their own reviews? - "all wet", "all washed up", "limp as a wet dishrag"). Other recommendations of good creepy psychological thrillers: Repulsion, The Others, Eraserhead, The Haunting, Rosemary's Baby