First let me note that I've been a horror movie fan since age 5, and I've seen thousands of films in the genre. I would stack this one up against almost any I've seen, including such classics as "the Texas Chainsaw Massacre" by Toby Hooper and David Cronenberg's "Videodrome"; it's truly a unique, thoughtful, and disturbing film.
The film effortlessly weaves the ordinary horror of a stalker movie with the extraordinary horror of the supernatural. The director knows when to pile on the gore and when to hold discreetly back; the big fright scenes hit me with a physical impact that I haven't experienced in any film in a long time. The actors were completely unfamiliar to me--which made it easier to see and accept them as the characters, as opposed to their real selves, of course--and thoroughly convincing in their roles. Most horror movies rely on bad decisions by the characters--often inexplicably bad decisions--to drive the plot; not this one. The characters behave logically given their beliefs, and the plot is driven by their increasingly acute understanding of their situation, not by the kind of artificial idiocy that screenwriters turn to when they can't figure out a good reason why any sane person would open the door to the monster's lair.
Finally, the film is constructed so as to keep the audience guessing about what's real and what's not for almost its entire length. It's rare that a director can pull the audience's strings so effectively, over and over, without giving anything away. The logic of the film is satisfying, and it builds to a remarkably powerful conclusion that is both surprising and entirely earned.
I repeat that this overlooked movie is one of the best I've seen in the genre. If your taste in horror movies runs to none, or to the excuses for nonstop on screen dismemberment that many modern horror films embody, you may find it not to your liking. If you want a film that combines visceral horror with mystery and a highly original concept, this is for you.