In spite of good reviews and having its fans, some didn't like the movie upon its release. In fact, the first film was nominated for Worst Picture by the Golden Raspberry Awards and Heather Donahue even won for Worst Actress.
There is some argument that audiences who love the movie and audiences who hate the movie are split by those who live in suburban or rural areas and could relate more towards local urban legends, people disappearing, scary woods, and those who live in the city and wouldn't have any association with those things.
It goes way beyond that. Some people hate the movie because they just don't believe in the supernatural at all, so consider the very premise ludicrous. Others hate it because they believe wholly in the supernatural, and complain the kids were totally ill-prepared for walking into haunted woods hunting a possible Eldritch Abomination, making the kids Too Dumb to Live. Others hate it just because they think it should have a motion sickness warning in the opening. People who love the movie love it's tense atmosphere, innovative (at the time) storytelling device, and the pure, distilled Nothing Is Scarier approach. But almost invariably, people either think this is one of the best horror movies ever made, or a complete waste of time.
Narm: Heather's apology is a chilling scene, but the booger hanging off of her nose has taken more than a few people out of it. Scary Movie parodied it by having a geyser of snot pouring out of Cheri Oteri's nose during its take on the scene.
Nightmare Retardant: If the film scared you, watch it with the DVD commentary and that'll quickly change. The producers all goof around discussing things like getting the rights for the groceries in the movie, Josh being "abducted" so early because he had to go to work on the third day of filming in the woods, and how the actors tried to jokingly catch them on camera when making noise in the middle of the night. The creepy image of the children's hand-prints on the halls of the old house is a bit hard to take seriously when the producers talk happily about bringing a gaggle of kids in in and just how much fun they had smearing their handprints all over the walls.
Paranoia Fuel: Try going to the woods after watching this movie and not feeling like something's watching you...
Rewatch Bonus: A lot if you check out the tie-in materials and backstory. If you know a certain aspect of the Rustin Parr story, (that he marked the graves of the people he killed with piles of stones), then you'll discover that the characters were doomed from the start.
Seinfeld Is Unfunny: In these days of dime-a-dozen "found footage" horror movies, it can be pretty hard to remember just how innovative the gimmick was in 1999.
Signature Scene: The apology scene, quoted atop the work page, in which the camera focuses on half of Heather's face as she stammers through an apology, alone and scared out of her mind.