I always split horror games into 2 categories:
1) "Scary" as sudden things appear, scream, scare you (you jump)
2) The atmosphere gives you a constant uncomfortable and spooky feeling but you don't get just instantly scared (people jump infront of you saying BOO!).

I don't like the first ones. I don't like it to jump and get scared. It's kinda a lame way to scare people, its way too easy.
But creating an atmosphere where you feel terrified all the time even, or especially, if nothing happens at all, is just awesome.

So yeah i watched a lets play of Amnesia and it was really scary already, even though i didnt play it, but they did a really good job with that game.

Games like the new RE games or dead space 1/2 sucks. Dead Space 2 really pisses me off when i watch people playing it. Feels like 80% of your time you stump on dead body parts to get items, and its just gross and annoying And i never felt scared in any situation, except for those "instant appear and make BOO" scare moments, which sucks.

One of the scariest games i've played is Clock Tower 1... that scared the shit out of me when i was younger, especially when i once got so scared i pulled out the Playstation controller and couldn't run away, i freaked out and pulled the plug