Seriously, I actually really liked Paranormal Activity, but...

So, before I begin, let me just say:
Paranormal Activity is a good movie. It is scary. It is ACTUALLY scary. None of this bloody "Saw" bullshit, but actually scary. With the amount of money put into it, it shows that people who aren't James Cameron can also make movies, and make them good. I would take Paranormal Activity over Avatar any day of the week.

Anecdote time: I'm a horror movie snob, so all during the movie I was all like "ooh paranormal activity you ain't scary whut" but then, out back of my friend's house where I accidentally locked myself out and there were no lights and I couldn't figure out the latch on the backyard fence, I was almost shitting myself. I still get creep'd out by thinking about my closet light turning on by itself.
Paranormal Activity was a f***ing effective movie.

That being said--and this might just be a horror-snob-nitpick--I really wish they hadn't have told us that it was a demon.
First of all, Demons are not universal. They're pretty big, sure: if you've been brought up any kind of Christian, it's terrifying. But anybody else, from members of other religions or the just-plain-secular, just doesn't have the background it takes to really appreciate the subtext of Demons.
Also, Demons aren't really that scary anymore. Honestly, after seeing The Exorcist, I am no longer phased by demons unless they make you vomit split pea soup.
I actually just lied to you- Demons are still pretty scary, but you can't top The Exorcist if you're trying to make them the Big Bad of your movie (I mean, Captain Howdy?? WHAT THE F***. Terrifying.)
The whole 'Demon' plot also just felt a bit tacked-on to me. Like, "HOLY SHIT TERRIFYING THINGS ARE HAPPENING and there's a demon. DISEMBODIED FOOTSTEPS and there's a demon. LIGHTS ARE TURNING ON BY THEMSELVES and there's a demon." It was the least plausible part of the movie, really, that the husband could google-search possession victims. I honestly don't care that it's a demon. More on that in a second.
It also takes away from the anonymity of the movie. The most effective part of Paranormal Activity was the fact that it took place in a home that was basically yours. The exact same style as countless suburbs across America. Like, I have friends who lived in a house like that. We all do. Or we live in a house like that. The characters are standard people without much backstory--not much is needed in a movie like this--which allows the audience to project themselves into the scenario. It isn't even really important if the characters have names in this situation (maybe a drastic claim, but I stand by it.) The scariest part of the movie, then, is that this could be you.
But it isn't. The wife has been 'possessed' by the demon since she was a kid.
I wasn't.
Therefore, it couldn't happen to me. Right there, some of the fear is taken out. There is distance placed between the audience and the couple onscreen. To be fair, they try to save it by saying "Oh look at this other person who's been possessed! There seems to be no reasoning in how this demon chooses who to possess! It could possess anyone! Possess! Possess! Augh!" But personally, I don't buy it. I mean, the lady had been possessed since she was a little girl, so I'm assuming most of the audience watching the movie would have already known if this had happened to them or not.
By far my biggest problem, though, was in knowing the Big Bad was a demon, we know the Big Bad was a demon.
Let me explain: H.P. Lovecraft, in his essay "Supernatural Horror in Literature," opens with the phrase "The oldest and strongest emotion of mankind is fear, and the oldest and strongest kind of fear is the fear of the unknown" (Lovecraft, p.12 of my edition, if you're interested.)
So, by naming the Demon as a Demon, the movie immediately takes away that fear. Sure, it's still terrifying to know that there's a Demon in your house, but at least you know that it's a Demon. There are steps that can be taken. In horror, identification can be half the battle.
Just imagine the movie, though, if the couple has no idea what's going on. There are thumps and footsteps, faucets turning on and all that, and the couple says "woah, that's weird, let's film it." And then it gets worse. There's something in the house with them. And then they figure out that it's intelligent. Some intelligent, invisible, completely evil force that is slowly exerting more and more influence over their lives. They have absolutely no control.
Think of how terrifying it would make the picture the husband finds in the attic. Like, 'Holy shit, this thing hates you and has been f***ing with you since you were a child and you have no idea what it is or why it's doing it.'
And think of how terrifying it would make the buildup to the later parts of the movie!
(Side rant: the best part of the movie was her getting dragged out of bed. It took the threat from 'loud noises' to 'HOLY SHIT IT WANTS TO KILL YOU.' Holy CRAP that sequence was done so well!)
I mean, the progression from thumps to dragging her out of the bed to where she stands over her husband for hours would be so much better if the audience didn't know why it was happening! It drives home the whole 'random' thing SO much better than "ooh a demon can possess anybody ooh!"

Seriously though: it's still a really good movie. What it does well, it does REALLY well. I especially like the fact that, apparently, there were things in the movie that were only in some of the showings and not others. I just think that's cool.
(Speaking of which, I'm going off of the alternate ending here, not the cheesy J-horror ending where the guy gets thrown at the camera. Whole 'nother rant there.)
So yeah, that's what I'd do differently, but I still wholeheartedly recommend it. VERY good movie.

PS- the only thing I didn't really like action-wise was the ouiji board that lit on fire. That was pretty goofy.