I wouldnt really call Eraserhead horror...amazing movie, but hard to classify.

yeah, your friend must not have much of an imagination if The Shining is unrealistic... if the shining is unrealistic, go see Evil Dead, or even fucking Madagascar, what's so realistic about talking animals. I bet his favorate movie is unrealistic. Ask him what it is and then tell us. I bet it is.

Experimental horror.

I'm reading a book on horror, and there's a section on Eraserhead.

The Shining is unrealistic. It just is...

Evil Dead is too of course, but it's not the most unrealistic. There aren't many horror movies that are "realistic", just optimistic or imaginative. A few slashers are sort of realistic though.