Horror is in the eye of the beholder? I resist allowing an author to have free reign with my mind's eye. The grotesque of most modern imaginative horror is more than I care to experience. The true grotesque of this world is stark enough, I think, and the souls trapped within it are worthy of our real emotional interaction. I want horror writing that keeps me mindful of God's purposes in the dark places of the earth.
The craft of building dread without adulterating the reader marks good Christian horror in my opinion. I appreciate the author who accomplishes that (and I have found that quality of writing right on this site:). I think it serves a gospel purpose when it turns a character or reader to admit a worldview that includes the Bible God. The "gratuitous violence and gore" Accord64 speaks of appears to me to revel in the demonic and avoid this God.
The question this brings up that I have grappled with a lot in the past year is, "What manipulation of another's imagination is good, acceptable, and perfect in Christ's opinion?"