It wasn't universally liked, but I was a fan of a game called Shadow of Destiny (Shadow of Memories in Japan). In it, you travel through time trying to prevent your own murder and find out who keeps trying to kill you.
The graphics are bland for a PS2 game.
The soundtrack is generally terribly and sounds like it's trying to ape the worst part of the "More" soundtrack by Pink Floydhttps://www.youtube.com/watch?v=wTPyQQh94Ac&list=PLB789F091023C94D8&index=6
And the voice acting is weak.
The concept is really cool and the game as a whole is way better than the sum of its parts. It's definitely worth a play through once. It's not very long and is pretty cheap, especially on PSP.
Has anyone played any of the Fatal Frame games? I noticed no one has mentioned them (I've never played any of them myself, but want to). They have a reputation for being pretty danged spooky. Some would say among the best of the genre.
They're creepy as hell. I had to turn the lights on while playing the first one which I never have to do, even for Silent Hill. The best version of Fatal Frame 2 is on the OG Xbox, if you can find it.
Eternal Darkness isn't scary in the way that Fatal Frame is, but it creates a great atmosphere, the voice acting really, really adds to the game and the sanity effects are really cool. I would consider it a must play if you're a horror fan.
Kuon is okay, but not worth $80. Had no idea it was worth that much. Rule of Rose, on the other hand, is worth the price. Even with the gimpy gameplay, I really enjoyed it.
One I haven't seen mentioned yet is Cursed Mountain. It's a Wii game, so the graphics aren't HD etc. but the atmosphere is amazing. It's more like Eternal Darkness in that's it's creepy and not scary. It's slower paced and not really action based, i.e. it's more Silent Hill than Resident Evil 2. However, it's insanely cheap.
Oh, and if you like Dead Space, get Dead Space Extraction. It's a surprisingly fun horror FPS for the Wii.