i really need to necro this thread because i just thought about shalebridge cradle from thief 3. i got to say, that game is one of only 2 games that have ever really physically induced dread and actual FEAR for me. if you havent played shalebridge, you havent been scared by a game.
also, i feel like stealth games are the only games that really can do fear. every other type has the player being empowered, lacking the fear and dread element.