"House on Haunted Hill," like the startlingly similar "The Haunting," which was released last July, is a frustrating experience more than a frightening one. There are differences between them, to be sure. While "The Haunting" was more sophisticated, with a superior cast, a budget of around $80-million, and a kid-friendly PG-13 rating, "House on Haunted Hill" is a gory, atmospheric, $20-million, R-rated spookathon. What the two films do have in common, however, aside from the basic plot mechanisms, is a sense of real promise early on, only to abysmally fall apart in the cheesy, special-effects-laden climax. Both directors, William Malone and Jan De Bont, clearly spent a great deal of time getting the mood and "look" of their films exactly right, and yet they forgot that not only is the setup often times scarier than the payoff, but that in order to care about a movie like this, you have to want to root for the characters. No such luck here. Oh, and both films are receiving from me a none-too-positive 1 1/2-star, though "House on Haunted Hill" is probably a little better, simply because it has the courage of its convictions to make an actual horror movie, rather than "The Haunting," which was akin to taking a ride in the Haunted Mansion at Disney World.

After a memorably stylish opening credits sequence and a brief prologue set in 1931, in which all but five patients at a sprawling psychiatric hospital die in a mysterious fire, the film really takes off with the first appearance of Steven Price (Geoffrey Rush), a twisted amusement park entrepreneur. Holding an interview with a local news reporter (singer Lisa Loeb, in the most engaging performance of the whole film), she questions exactly why the newest rollercoaster is supposed to be so scary, and Steven physically shows her and her cameraman (James Marsters) why. As we are taken on the ride with the characters, the film plays with your mind and offers genuine surprises and excitement not seen once the main storyline comes into focus.

On a dark, foreboding night, five strangers are lured into a mansion that is sprawled upon a cliff overseeing the ocean--the same one that the fire took place at in 1931. Four of the people--former pro football player Eddie Baker (Taye Diggs), physician Donald Blackburn (Peter Gallager), washed-up gameshow host Melissa Marr (Bridgette Wilson), and supposed-to-be CEO of a film company Jennifer Jenzen (Ali Larter)--have all gotten an invitation to attend the birthday party of Steven Price's gold-digging wife Evelyn (Famke Janssen), and along with the cautious owner of the property Watson Pritchett (Chris Kattan), become trapped in the building once inside. It is here that Steven makes everybody a proposal: stay in the house all night long, without dying, and they each will be rewarded with a $1-million check. The catch, it turns out, is that the house really is being haunted by the maniacal doctor (Jeffrey Combs) who was killed in 1931, and that all five guests are unknowingly related to the five inmates who survived decades before.

Admittedly, "House on Haunted Hill" has a zinger of a premise, a sort of ghastly rendition of 1993's "Indecent Proposal," in which people were asked if they'd cheat on their spouse for one night, and a million smackers, with Robert Redford. After the marvelous first fifteen minutes, the picture's interest quickly unravels because the stick-thin characters that inhabit the film are thoroughly repugnant people who either you want to die, or don't particularly care either way.

But then, once the two sole virtuous characters (played well, under the circumstances, by Taye Diggs and Ali Larter) make their way down into the decrepit basement to look around, the film gradually starts to grow very creepy, at least more so than last week's godawful "Bats." The middle section of the film is surely the best, offering up haunting (no pun intended) images that are truly disturbing and surprisingly psychological in nature. Very little violence is shown onscreen, nor are there many blatant visual effects that mar its effectiveness. Sitting back and watching the film, it occurred to me that maybe, after all, this late-Halloween offering might actually have something to offer. One particular sequence, in which Melissa is investigating the house and comes to an empty room that, through her video camera, shows a doctor and two nurses working on a mental patient who suddenly stop and stare straight at her, is scarier than the whole 2-hour-plus "The Haunting."

The film ultimately begins to sour soon after, as the interplay between Steven Price and Evelyn not only is cold-hearted and off-putting, but also disastrously acted by the usually talented performers Geoffrey Rush and Famke Janssen. Descending on its shameful downward spiral, plot twists that come off as more dubious than unpredictable begin arising, the psychotic ghost of the doctor completely disappears from the proceedings, and indiscernible visual effects take over, foolishly revealing its low budget. Topping things off are a despicable, ragtag group of victims whom you practically learn nothing about throughout, unless they are uncovered to be involved in one of the late plot developments. The ending, especially, leaves you begging the question, "Is that it?!"

With an ominously unforgettable production design and appropriately brooding cinematography, by Rick Bota, watching "House on Haunted Hill" is like going to a restaurant where the food looks delectable, but tastes awful. There are several hints of the subjectively horrifying experience the film might very well have been, along the lines of "The Blair Witch Project" or "The Sixth Sense," but director William Malone and screenwriter Dick Beebe botch the results. It's about time filmmakers realize that character and story are more important than special effects, particularly when you obviously don't even have the money to make the effects the least bit believable to begin with.