I went to see it and, speaking as one who believes in the paranormal, it was probably the scariest movie I've ever seen.
Paranormal Activity is shot in the style of Blair Witch or Cloverfield. It's the story of a couple wherein the girlfriend has been tormented by some kind of spirit since she was 8. Basically, the film is a series of paranormal activities. No spoilers here, but if you're susceptible to other opinions influencing your own, skip to the bottom for a general recommendation.
Now, when I say scary, alot of you are thinking of shock scares, right? The cheapest, lamest way to get someone scared, right?
WRONG! This movie is, not to give spoilers, one that builds and builds tension, only giving something resembling a shock scare very, VERY few times. What you imagine being scared by in a haunting is what you're scared by. Footsteps, moving doors, moving bedsheets (Again, no spoilers, that's in the trailer) all build up your fear until, by the end, you'll beg for the big scare to end it all. Trust me, this film is scary. I'm 19 and it was the first movie I've seen in years that has given me difficulty sleeping.
And best of all? The characters are LIKEABLE! I genuinely cared about them and wanted them to survive their ordeal. It's not like the typical "horror" movies wherein the entire film is predicated on your wanting each character to die in horrible ways.
I have to stress that if you see it, though, watch it in theaters. Watch it in theaters. MAKE SURE you go and watch it in theaters. Preferably at night. The experience is very much heightened. Although I've heard, and this is a good suggestion, that since the film takes place in a home, watching it in your own home might transcend the fear of the characters of their home onto you and your own home. But, that won't be for awhile, and, since this isn't a shock scare movie, knowing what's gonna happen ahead of time isn't REALLY gonna help decrease the fear, so seeing it now won't water down the experience if you get it on DVD next year.
My recommendation: See it in theaters, if you like it, get it for home next year. And, if you haven't already, don't watch the trailers. All you really need to know about the film is it's a home-video style film about a series of paranormal happenings.
Edit: If you want a second opinion, try this.
http://blip.tv/file/2707723/Or for a third:
http://blip.tv/file/2727920/