If games such as Silent Hill and Resident Evil interest you, this should be right up your alley.
Tecmo's Fatal Frame is one of those "alternative" survival horror games, falling in the same category as games such as D2 and Illbleed. Developed in-house at Tecmo by the team responsible for the acclaimed Deception series, Fatal Frame does manage to stand a good bit higher than its offbeat kin. The game is quite stylish, and it's built around a set of interesting game mechanics, which make many of its sequences quite enjoyable. Most of these revolve around the combat system, which essentially lets you "kill" ghosts by taking pictures of them with your magical camera. Despite how silly this might sound, though, Fatal Frame, like most horror games, takes itself very seriously. Its narrative revolves around mysterious disappearances, ritual sacrifices, and restless spirits, all of which are presented to you in a straight-faced manner. It's par for the course, given the genre, though you'll honestly find some sequences rather creepy. Novel gameplay elements and decently conceived story aside, however, Fatal Frame doesn't stray too far from the things that have traditionally held back survival horror games--specifically formulaic, repetitive puzzles and more backtracking than you can stand.
The story behind it all is as follows: A young girl named Miku Hinasaki has ventured into the mysterious Himuro Mansion, the last known whereabouts of her missing older brother, Mafuyu. Mafuyu had ventured inside to investigate the mysterious disappearance of a certain renowned author named Junsei Takamine, who is Mafuyu's idol. Takamine's aim was to study the mansion's mysterious and bloody history, and, as you've imagined, neither him nor any of the members of his research team have been heard from since. You take the role of Miku, who, in the search for her brother, manages to learn all about the craziness going on at the Himuro Mansion and find out a bit more about Takamine and company than she probably wants to know. You get to play as Mafuyu in the game's introductory sequence, and this is a pretty interesting touch. The lengthy sequence--which serves the double purpose of a tutorial for the game's basic mechanics--is rendered in noisy black and white, and the look is quite impressive.
If you've played any modern horror game, Fatal Frame's layout and perspective will feel instantly familiar. Through a series of fixed (though often dynamically so) camera angles, you'll get to explore the confined interiors of Himuro Mansion, as well as its shadowy grounds. You interact with objects by standing near them and pressing the X button, which usually has you examining them, though when you're holding a "key" object, you'll be given the option of using it. Thankfully, the controls are fully 3D, so you won't have to deal with Resident Evil-style pivot-and-move mechanics; you simply point in your desired direction, and off you go. All of this changes quite radically once you engage in combat, however, and the battles easily comprise the game's most inspired and interesting sequences.
Since you're dealing with ghosts, it's logical to assume that shooting them with a camera will vaporize them into nonexistence. But if you don't follow this logic, you're not alone. Given how much fun Fatal Frame makes this seem like, though, you probably won't care a great deal. Basically, hitting the circle button on the PS2 pad will cause you to switch into camera mode, which is essentially a first-person view from your camera's viewfinder. When in combat, you simply have to target ghosts with your viewfinder and snap shots to damage them. The longer you hold the ghosts in your reticle, the more damage you'll do, and this is indicated by a series of runes on the interface--runes that gradually light up as you maintain "lock." Of course, as you're doing this, the ghosts will attempt to advance upon you, so you should expect to regularly snap out of camera view to put some space between you and your enemies. You are able to move while in camera view by means of the right stick, and, while this is pretty useful when it comes to inching away from enemies as you shoot them, you'll find that a full run is necessary to outsmart some of the quicker ghosts. Honestly, though, combat in Fatal Frame is at its best when you don't have to deal with any of this; the shift in perspective is pretty jarring, given the engine's fixed-camera nature. When required to do so, you'll often find yourself running into walls and backing directly into ghosts, among other similarly unpleasant things. Still, when at its best, the combat is tight and tense, not to mention nicely absurd.