I'm about six hours into Fatal Frame and I'm scared. The game does atmosphere exceedingly well, particularly when played loudly in a dark room. Once you're into it, it's very tough to shake off and you'll be convincing yourself that your own house in infested with evil spirits. Ghosts seem much more likely to be lurking at the bottom of my basement steps than, say, zombies. Or zombie dogs, zombie spiders, or ten foot tall zombies in trench coats.
Fatal Frame is survival horror, and everybody wants to hold that against it. It's not like we have a ton of survival horror games out there; there's no glut on this genre. We have the Resident Evil series and the Silent Hill series. That's about 7 games total. That's about how many PSX light gun games there are, and I never heard anybody complaining about "yet another light gun game" being released.
Some time ago I did some reading on how the Japanese value silence. Or, more accurately, the importance of nothingness used in conjunction with somethingness. It's the fundamental explanation of Yin and Yang, and it's why Dragon Ball Z constantly has all those scenes with no one saying anything. (Which the American dubbists naturally fill with character grunts and exposition, because US audiences can't stand watching *nothing* happen.) Fatal Frame - which takes place in Japan and is based on a Japanese legend - is a game of intervals like this. At 6 hours, I have dispelled less than 30 ghosts. That's about 1 ghost every 15 minutes. A far cry from Resident Evil, where you'll kick the heads off 30 zombies before you hit your first light puzzle.
And I think that Fatal Frame has a kind of realistic elegance to it that RE and Silent Hill lack. The RE games have some great moments, but then there's the silly non-sensical elements... from Jill Valentine being the "Master of Unlocking" to that strange Magic Box inventory system. Silent Hill goes too far into over-gruesome, Clive Barker horror. Eventually, both series create their own immunity and you're just as non-plussed by a Silent Hill faceless nurse as one of RE's maggoty dobermans. Just another set of polygons to kill.
Fatal Frame is survival horror, but more grounded than Silent Hill and more eloquent than Resident Evil. I'll do a full review of it later, but until then, don't let the insipid box art scare you. The game will do that on its own.