OK, I just watched the new horror film, Paranormal Activity. I feel safe in saying 'Forget Saw', this is the scariest movie I've seen in a while.
Much like The Blair Witch Project, this is all shot on handheld camera. This time, instead of being lost in the woods and haunted by a witch/ghost/missing party member, it's a young couple who's house is haunted at night.
It's creepy as opposed to gory. It does start out a bit slow, but that's getting to know the characters. Once strange stuff starts happening at night, especially after the boyfriend repeatedly makes light of the situation, tension amps up as the shit gets weirder and weirder.
In the end you get a horror movie that's tastefully well done, and enough lingering effects to awaken you at night when you hear a strange noise.