I love Silten Hill. Quite simply, just a sublime series of games! I also have a deep love for Resident Evil, though I find them to be more "cool" than scary or disturbing.
My favourite "scary" games are Forbidden Siren 1 and 2, or just Siren for you US gamers! Very japanese, incredibly well made with amazing detail and realism, and stories so well paced they keep you hook and make you genuinely empathise with the characters. Also, the idea of a stealth survival horror was very much an inspired one!
Mind you, I should warn anyone thinking of buying them that the first game will make weak minds weep and beg for death, such can be it's level of difficulty at times. It was a big thing for me, completing a game which had been such a challenge!
The second game is soooo much easier, but just as good, as the story is just as strong and the chance of location and feel in the game keeps things fresh. Also, the interaction between the characters great, and in the end you'll grow to love the characters. You'll cheer when the geek becomes the hero, and when Yorito, the apprehensive solider, finally lets go of everything that holds him down in life and succumbs to an utterly beautiful madness.