"I'm afraid to close my eyes. I'm afraid to open them."
The Blair Witch Project was the first really popular "found footage" movie of my generation, and Cloverfield, Paranormal Activity, [Rec]/Quarantine, and other movies owe a lot of their success to this low-budget flick. If was mega-popular (though divisive) when it was released in 1999, but is it still chilling when watched today? For the most part, yes.
What makes The Blair Witch Project effective is the great way that atmosphere and fear of the unknown are used, as well as how well the three actors sell their frustration, unease, and finally, terror. As the three amateur filmmakers get more and more lost in the woods, their anger and annoyance at one another and their situation does a great job of raising the tension. Add that to the local legends that they were exposed to before venturing out into the wilderness and the odd, disturbing events that start happening each night, and you've got a pretty creepy little film.
The key to enjoying movies like The Blair Witch Project is how easily you can suspend your sense of disbelief and just go with what you're seeing. If the movie can draw you in, you'll probably have a good time with it. I didn't have a hard time putting myself in the shoes of our trio, and I know that if I had been in their situation, I would have been well and properly freaked out. It had been probably five years since I last saw this, but It still gave me the creeps and I still love the ending. It's a fun movie for the right kind of horror fan.