I've long thought of The Blair Witch Project as my favourite horror film. You have to approach it in the right context in order to 'get it', but once you do it's beyond belief how scary it can be. The context I speak of is that of, not just watching a horror befall the characters in the film, but to imagine instead that you are there and that you personally are one of those suffering this excruciating psychological ordeal. I've camped in the woods many times, and I know too well that if that shit that occurs in the Blair Witch should ever happen to me then I would full-ball lose my mind with fear; the Witch is depicted as such a perfectly unexplainable, unstoppable and even unchallengeable supernatural force that no amount of logical thinking or practical adherence would ever begin to work in your favour towards a desirable outcome; basically, once the Blair Witch starts fecking with you, you're already dead with your soul hers to torment forevermore. This is an important aspect of the horror for me, the outright unexplainable supernatural nature of the Witch, because as an atheist and a total sceptic, the unequivocal display of proof that my entire worldview was completely wrong as depicted in the film would itself go a long way towards driving me to a hysterical madness. People are critical of the fact that you don't really see anything, you don't see the Witch etc., but for me that's not relevant since it's the evidence of the Witch and the knowledge that she's out there stalking and twisting reality to her own diabolical end that represents the real fear - not the seeing of it but rather the knowing of it. That's why, for me personally, The Blair Witch Project is the best horror film ever made.
For best viewing one should watch the supporting documentary 'The Curse of The Blair Witch' beforehand.