Custom stories are much more scarier than the main one that's for sure.
Maybe I should try it again, one of my friend has it and he is the only guy who play the game, we used to play together with my other 2 friends accompanied by chips and hot coffee, ah the good old times.
What makes a horror scary is the fact that you don't feel you're protected from threats around you, i.e. playing RE4 and running out of ammo while fighting few zombies is scarier than fighting 10 chainsaw bastards with a shotgun on your hand, at least in my opinion.
Ever try Fatal Frame?