[NB: there are spoilers below. Out of respect for anyone who's reading and has never seen the movie even at this late date but wants to, I advise such folk to skim or skip this post.]
I'm one of the people that the original Blair Witch Project "worked" for, very well indeed, even though I never fell for the hype that it was for real. The first time I watched it I started getting forbodings right away watching the three young fools gadding about and interviewing locals--especially the sequence with the two outdoorsmen who were reluctant to talk about the witch legends, and the crazy woman who wasn't a bit reticent.
The scene with all the fetish figures hung in the trees and the little cairns underfoot creeped me out something fierce. And the idea that something--evil spirits, maybe, or the land itself--was fucking with the kids and leading them in circles until they were hopelessly lost and far away from any chance of rescue, seemed plausible to me, in the sense that there's plenty of folklore concerning malevolent entities or blighted locales which do just that to people who stray into their areas of influence.
Then there was the night scene where the tent is attacked by....little kids' hands and the sound of their laughter, and you hear the protagonists yelling "Do you see that?" and "What the fuck IS it?" while we, the audience, don't see what they're screaming about. That sequence flat-out terrified me! So did the moment when the girl finds the little bundle of cloth and opens it to find blood and teeth....and so did the whole ending. The pursuit aspect, and how the imagery just kept getting weirder and more menacing, were horrific and rather convincing, and when the camera revealed the dude standing with his back to the camera and then fell to the ground, I let out an unembarassed short scream right there in the theatre, flashing back to the story about Rustin Parr earlier in the movie. I wasn't the only one who did so, either.
It's among the few horror movies I've seen as a jaded adult which actually had me nervous about going into dark rooms by myself for a week afterward.