Firstly, this film didn't appeal to me when it was on at the flicks, so I basically watched it tonight on SKY movies as there was nothing else on. I heard it was incredibly sick, blood, guts, torture and painful scenes, so I was expecting the worst.
The first part of the film was going quite nicely - usual childish American boy behaviour - getting stoned, looking for a European girl to sleep with and not understanding the European culture. I could accept and quite enjoy this part of the film. As mentioned in other comments, you could label this film 'soft porn', certainly not a movie you watch with your parents.
Then came the blood - the hostel scenes were clearly made to shock. Most people will use humour to block out the sickness and gore, and if you laugh through the 'sick' scenes, you'll be ok. However, my point is, why are films made like this which although, can boast good special effects, lacks plot and thought from the writer? All I can think of is that the film companies believe the audiences like this sort of thing. For me, this isn't my type of horror film. The best modern day horror, in my opinion, is Wolf Creek. Although there are 'shocking' scenes in Wolf Creek, it has a stronger plot than Hostel, with physicological horror making it a better film.
So, leaving to one side my opinion of what makes a good horror, and looking at reviewing Hostel as a reviewer, I'd give the film a 3 star. You can't really say you can enjoy a film like this and it doesn't do the Eastern European countries tourist board any good. Do the Americans now think you have to watch out for groups of kids when going on holiday to Bratislava in case they held you up for ransom and demand bubble gum. Do Americans now advise you don't book into a hostel? Are there notices on American's fraternity walls saying, "if you go to Europe on your vacation this year, don't chat up gorgeous Italian/Russian girls" ???
All in all, watch Hostel if you want an entertaining movie and there's nothing else on, or if you want to be sickened, or aren't quite mentally stable!