Yeah, he was pretty terrifying, I agree.
But personally, I'd rank SH1 above just for the freaky music coupled with the atmosphere. SH2 had plenty of freaky moments, but the music...they just nailed it in the first one.
huaxiong, have you played 4?
while I agree that 1 had an amazing soundtrack that can send chills through your spine, 4 took it to whole new level in terms of music.