Woah, weird. We just watched that last night. It didn't scare me, although the dolls were certainly creepy.
Unfortunately, as much as we love horror (and our dvd collection is mostly horror), we find it is very rarely scary. Too often we're more irritated in the rampant stupidity that is all so common in horror movies.
How can you be scared when you want everyone in the movie to die for being so annoying?
My top horror film of all time is John Carpenter's The Thing.
My favorite horror films on the cheesier end of the scale are:
Darkness Falls,
Soulkeeper (horror comedy),
the Final Destination trilogy,
Cemetery Man (I believe this may have a different name in the UK and Europe),
and Dead & Breakfast (another horror comedy).