A haunted house movie, basically - and one which deliberately invokes all of the tropes of the genre to good effect, often putting a spin on those familiar elements that pushes them in just a slightly different direction. In particular, the film's knowing in its use of The Turn of the Screw-esque trappings in playing out that old real/imagined ghosts ambiguity, the rendition of which, I've thought before (in a slightly different context), the medium of cinema particularly lends itself to; and, then, the way that that ambiguity is eventually resolved/left unresolved is both unsurprising and deeply consonant with the most interesting aspects of the film, not to mention rather satisfying.
It is quite scary - unsettling, with a few huge 'jump' and, separately, 'chills' moments in its second half - and I think that's part of the film's primary purpose: it's supposed to have that kind of effect, just for its own sake. But then, too, the unsettling elements of The Orphanage are wrapped up with, and feed into, its wider narrative concerns, particularly the 'Peter Pan' thread and the questioning of perception/reality; there are creepiness-induced chills throughout, but then the last couple, which we experience (physiologically) identically to those earlier ones, are actually brought on by something rather different (if bound up with the earlier creepiness inasmuch as they follow from them), a genuine emotional experience.
(w/ Michelle, Tamara and Andrew B - all enjoyed the film, I think, though MF and TV seemed seriously creeped out by it)