I loved it and had the same sort of reactions, the tension the game builds is palpable, and the scares had me jumping out of my seat more than once.
I have the 2nd game but have yet to play it. Alas, I will have to wait for the 3rd to hit the bargain bins before I pick it up. I feel sort of guilty about this as I recently read somewhere that this will be the last game in the series because it's not profitable enough for the publisher. Very sad.