I've been playing this game this week and I just started Episode 5.
It has given the most scares/creeps/goose bumps since Resident Evil Code Veronica. I love the night time sections and I'm finding the story and more importantly how it is being told very enjoyable. I was just telling the wife last night, that if they had added random wildlife (besides birds) like rabbits, deer, wolves, etc it could have been way more scarier/intense.
It is definitely my game of the first half of this year. For reference, other really great games I played this year include Uncharted 1 & 2, GOW III, and SSFIV. My only knock against it, maybe that it will probably be too short. I am playing through with a friend's copy, but plan to buy it new just to get into the dlc Episodes.