Hmmm....
You NEVER see the Witch, although there was a very early cut of the film where she's seen briefly, but it was deemed that it looked pretty crap so they ditched it.
It is of course, not a true story. However, it was the first film to make full use of the Internet and the potential for marketing and the website was set up well in advance of the film. To help things along though, the film was originally screened with no end credits, so as to help with the illusion.
By the time it had reached our shores though the myth had been broked and we all realised that we were just watching a movie (Though what I would give to be one of the first audiences).
As someone pointed out, the actors were not really 'actors' at that point, though I do believe they were aspiring. The banter in the film is improvised, and sometimes one of the actors were given certain things to do (Like when one of the group goes missing - none of the others knew about that). It's actually the film makers who left the sticks and the pile of rocks outside the tents and just watched from a distance as they freaked out. It must've been hell for the actors really.
Oh and it is possible to like it on multiple viewings, even if you didn't like it the first time. I worked at the Cinema when it came out and detested the film...I really really hate it. But then for some reason I wrote about the final scene for Film Studies, so I begrudginly watched the film again and found myself loving it. Very odd and not something I can really explain.