As I said, genuinely frightening. It has a pretty decent plot, but what's more important is that it has a perfect mix of tense moments and jump scares, and the use of old-school horror strings over the credits work perfectly - at the start it sends us instantly into horror mode.
Insidious is only marred by one certain 'workshop' scene (in my opinion) which gave the film the 'Jeepers Creepers effect' (copyrighted phrase :]). I don't want to give away the scene, but if you've seen both films you'll probably know what I mean.
I love horror movies, but I hardly ever get scared by them. I'm not trying to sound all macho, it's just that at worse I usually get a little freaked out then forget about it. Insidious and Paranormal Activity are probably the only two which have given me a hard time getting to sleep right after watching. And if that's not enough to prove that it's scary, I discovered I have marks on either side of my chest from grabbing so hard during the tense moments!
Fans of horror, take a look.