Like "Blair Witch", except with steadier camerawork and actually scary.
"Paranormal Activity" has a lot of things going for it: good, subtle effects; a restrained, careful buildup in the story that freaks you out with baby powder and doors being pulled by wires instead of trying to make a cartoon character scary; and an ability to tap our deepest fear of being attacked while we sleep, at our most vulnerable.
Unfortunately, it also features as a lead character Micah Sloat, who continues the long tradition of horror movie characters who have never seen a horror movie, read a horror novel, or are remotely familiar with the idea that maybe, just maybe, the invisible creepy thing sneaking around your house probably can not be taken out by you punching it repeatedly.
Sure, at first the invisible antagonist is just slamming doors, breaking glass, and generally acting like a dick. But once he starts setting Ouija boards on fire and dragging your wife off, do you A) realize you're in over your head, call in an expert whose number you've had since the trouble's started, and listen to another expert telling you that pretty much everything you're doing is pissing it off and making it more inclined to snack on your wife, or B) do you goof off on the Internet, threaten something you can't even see repeatedly and fucks with you while you sleep, and keep promising that you'll figure something out, instead of doing something that might remotely help the situation at all?
If you picked B), congratulations, you're just like Micah Sloat.
Aside from this, "Paranormal Activity" is probably the best horror movie you'll catch all year. It tells you something that the reason it took three years for it to hit screens wasn't because Hollywood didn't know what it had: Hollywood spent three years trying to remake it before realizing just putting it out would make them oodles of cash.