It is not only scary, but it is a very smart movie. It doesn't have any gore or even much suspense, except at the end. What it does as well as any movie I've ever seen, however, is slowly build a sense of dread- kind of like the Shining or the Exorcist.
Another thing I thought was cool was how little clues were interspersed throughout the film in unobtrusive ways as to what was really going on, without anything overt happening to tip you off- sorta like Shyamalan flicks.
I wouldn't recommend it to fans of Jason Vorhees, but if you like a slow burn, watch this movie, it will stick in your head!