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I have to say, the absolute best found footage stuff I have seen is by far "Marble Hornets" which is a youtube series about Slenderman, which scared the poop out of me. I was seriously terrified!
Following this, my favorite would be "Troll Hunter" because it wasn't scary but it was a lot of fun. I thought that was a totally awesome movie.
I really didn't like "Blair Witch Project" but it did scare me to death seeing as I was growing up in the country at the time. I can respect it for what it did though, and for what came from such a creative film.
I also hated "Paranormal Activity" because it scared the living poop out of me as well. I couldn't sleep after watching that either. And I refuse to watch any of the other films because of how scared I was. That's not saying it's a bad movie, it was just terrifying.
I really like the VHS films (the first being my least favorite). They aren't really scary but they are fun to watch. I just think the first one was too crude. I liked all the others quite a bit though.
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