It has been two years and just as many film festivals (Screamfest and Slamdance) since "Paranormal Activity" first premiered, but luck has seemingly shined down upon it in the interim. Shot for a shoestring $15,000, the picture was picked up by Paramount and Dreamworks with the original intention of remaking it with a bigger budget. When test screenings led to rapturous talk and acclaim and a bigwig by the name of Steven Spielberg watched it and allegedly became freaked out afterwards, the distributors wisely tossed out those plans and agreed that they already had something potentially special on their hands. Their release plan is unorthodox—releasing the film in ten random college towns for midnight screenings only, and then widening it to other cities based on a "Demand It" website voting system—but early signs point to the possibility that it may share a similar lightning-in-a-bottle success story as its forefather and most obvious inspiration, 1999's "The Blair Witch Project."

"Paranormal Activity" is no "The Blair Witch Project," still one of the most frightening first-time viewing experiences of my life, and it is difficult to imagine that this new film would have been made without the existence of the other one. One is set in a house, the other in the woods, but their narrative progression is nearly identical, as are the terrorized characters' deteriorating mental states as they face an unimaginable situation they have no idea how to get out of. Additionally, both movies are told through the lens of a household video camera, purportedly edited from found footage, and share a number of similar shot compositions. Whereas "The Blair Witch Project" was a tad bit more gritty and raw, ratcheting up an uneasy pall of dread that became almost suffocating by its final ten minutes, "Paranormal Activity" does not have quite the same steady momentum. Its grab-bag of frights are of a spottier, start-and-stop variety, but when they are pulled off, they work like gangbusters.

Young San Diego couple Katie (Katie Featherston) and Micah (Micah Sloat) sense a supernatural presence in their home and have decided to start shooting surveillance in their bedroom overnight in the hopes of maybe picking something up. For Katie, she has been haunted off and on since the age of eight, where she lives making no difference. A psychic (Mark Fredrichs) agrees to try and bring insight to their problem, and quickly lets them know that he not only senses negative energy in the house, but that the haunting is of demonic forces rather than ghostly ones. Unable to escape the horrors happening around them, Katie and Micah's relationship is put to the test as Micah insists on continuing to film and the otherworldly encounters become more frequent and violent.

"Paranormal Activity" is in danger of getting overhyped and, as a result, creating negative word-of-mouth for itself. That comes with the territory. Seen for what it is—a movie made in a week's time for a budget of next to nothing—the film is close to phenomenal. First-time feature actors Katie Featherston and Micah Sloat sell their onscreen reality by not seeming to act at all, becoming their characters without any traces of artifice. Their relationship, intensifying and becoming rockier as the stakes are raised and desperation takes over, is uncommonly truthful, the sympathetic foundation for which to pile on the spookiness. Debuting filmmaker Oren Peli knows what it takes to scare the viewer, and achieves this feat over and over with the subtlest of tactics, from a door moving by itself to the sound of stomping edging closer. The threats grow ballsier and more extreme, to be sure, and all the while it is the lingering fear of what might come next that leaves the most chilling of impressions. A scene where Katie and Micah wake up to find inhuman footprints in the baby powder they have methodically placed across the hardwood floor is creepy, but it is what follows—a discovery that the attic hatch is askew and Micah's investigation of what may or may not be hiding up there—that really makes one's skin crawl.

Millions of dollars and countless seat-jumping scare tactics mean nothing if there aren't characters worth caring about and a story that understands the value of using restraint to build genuine tension. Director Oren Peli achieves all of these things with far fewer resources, and he is all the better for his minimalist touch. When the mere opening of a curtain or entrance into a room can cause audience gasps and recoiling, you know you've done something right. Only in the aforementioned derivative recalls to "The Blair Witch Project" and in an ending that startles, but happens too quickly to be anything other than anticlimactic, does the spell falter. The viewer walks out of "Paranormal Activity" wishing there was more to it (nothing in it compares to the nightmare-personified last minutes of 2007's "[REC]"), while acknowledging all the same that the film's cumulative impact is formidable, permeating long after the lights have come up.