This is the best horror game for the 360, simply because it's the only horror game for the 360.
Condemned starts you off as a detective looking for a serial killer, and the game is quick to put you in suspense, which I really liked about it. From the early stages of the story, you're hooked, and you ache to know more, and that's always a good thing. Unfortunatley, that's one of the few good things about this game, that could've really been something.
The good: this game has really beautiful graphics (gameplay graphics, not during cutscenes though), it really fails to disappoint on that end; great textures, great lighting, and good looking enviornments to run around in (but very bad shadows, but no big deal really). The game also has a very fun combat system, because I don't know many people who wouldn't seize the opportunity to beat the crap out of crazy, blood craved, insane (Ganado like) beings and although the combat is "straight through" simple, the game does get challenging a times. If you're into forensic science, you'll also appreciate the little gadgets you carry along with you, although you don't have a choice on when to use them, but it's a cool little addition nonetheless.
The bad: the game is short, only about 10 hours, although Achievements will have you playing it a couple times through (if you're into that stuff). The game's guns really...reek; first off, there is a smal variety to find, and each only has about 3-5 rounds before you have to discard of the gun or use it as a blunt weapon (which I found ammusing). Forensic equipment, as I said before, is very limited and although fun, it's just too simplistic and doesn't add the depth you'd like. Finally, if you're someone who like their First Person Shooters fast paced, you don't want this game; It's slow paced and you walk by default, and in order to run (you have a fatigue gauge by the way which will slow you down when it reaches zero) you have to press and hold and analog stick and you push forward simultaneosly, which I found very annoying and it could've easily been fixed but wasn't, too bad.
All that being said, Condemned is a fun game that shouldn't be missed by horror fans (it does provide the jumpy moments), and although it's got flaws left and right, it's got great potential and potential is always good. If you don't want to spend $60 on this title, atleast rent it, and make sure you pick up it's sequel if that ever hits the market; take my word for it, it'll spark the fire this game didn't manage to. Fun game, must play, don't buy.