I love it. Slide To Play reviewed it saying there's not much replay value, but I personally think there's tons. It's one of my favourites, and it's permanently on my front page of apps.
Resident Evil 2 and Resident Evil Code Veronica X. You should be set for a while with those two. EDIT: Just realized you were talking iPhone... well, there's not much, pretty much just Hysteria Project and Fallen-EP1
Soul. It is scary as hell. Seriously, I laughed when someone told me that, then I played it. Nerve rattling stuff.
CoD Zombies...play single player with you alone and in the night and you'll be afraid to turn off the lights
Here's a few: Resi 4 or Degeneration (decent ports of the mobile games, but both aren't all that scary. Just like 4 onwards, they're more action orientated). Doom Resurrection (Pretty scary, good pacing and on rails adds to that atmosphere. Just make sure you play on 1 of the harder settings). Dexter (maybe considered scary, but more adventure orientated). Hysteria Project (don't bother, short and never made the 2nd episode). There's a few coming soon with Gameloft's RE5 esque Zombie Infection and Chillengo's Vampire Origins.
Yes, because those low-res textures with minimal polygons and toned down audio groans will haunt you in the night...
Call of Duty Zombies doesn't really scare me. It's actually not that scary at all. That's for the iPod version though. The console versions might be a bit more scary though.
When I first got this game I tried that out to get the full atmosphere of the game, did nothing for me in terms of scariness, but was still a bloody good game
