As a long time horror fan myself I'd bemoaned how horror flicks had lost their edge and also had often discarded psychological horror in favor of cheap FX tricks ("Look at all the gore! It's a horror flick! Scared?" - no.)
A movie like Blair Witch, and it's success, restored some of my faith that people were still willing to take a horror movie seriously (that is, serve it straight up, without winking at the audience) and that people could still respond to a psychological horror movie done with "serious" intentions.
That flick affected both me and my friends when we watched it in a way that made us feel we were alone in the woods, being told the creepiest tale around a camp fire.
I feel the same about The Exorcist.
If I'm going to ask anyone else if they might recommend a good scary movie to me I'd say there is a major criteria: Did they find The Exorcist to be scary?
If they didn't - if they just didn't "get" what was supposed to be creepy about The Exorcist - then I have no trust in their aesthetic sensibilities for horror. May as well cue up "Gremlins."
Same goes for someone who dismisses Blair Witch project. I can't relate; our aesthetics for horror movies clearly don't match.
(I kinda of feel a bit that way about people who were scared by POLTERGEIST too. I remember seeing it and knowing how straining it was to be creepy...but it couldn't get around a Spielbergian influence of "show em neato special FX" and lots of winking-at-the-audience vibe moments, that for me sort of signalled an "uh-oh, I don't like where horror movies are going" signpost in my movie-going past. Not that it isn't a damned fun movie though).
I very much agree with this... and psychological horror is about the only brand that scares me anymore. I did enjoy Poltergeist and it scared me as a kid but the older I've gotten the more I've found that my imagination does a better job of scaring me if a movie is good enough to light that fuse.
As far as scariest movies I've ever seen -
Childhood: The Crate (story from Creepshow), An American Werewolf in London, and Alien.
Teens: A Nightmare on Elm Street, Silence of the Lambs, and The Serpent and the Rainbow.
Adult: The Devil's Adcotate, Storm of the Century, Signs, The Descent, Se7en, and [REC].
Not very scary but the award for most disturbing goes to Inside; the only horror movie in the past 30 years I can remember making me turn away.
Jaws is a fantastic example of something scary, because when you watch it, you think that this could happen in real life, even if the real life shark is not that big. Scares the heck out of you and makes you wonder every time you go into the water.