Horror games rarely have much of an effect on me. The only one that ever made me quit playing was the Colonel's Bequest, but that was when I was like 9. As an adult, the only other one that ever came close was playing Clock Tower for SNES for the first time; I didn't shut the game off but I was definitely nervous about entering new rooms and clicking on pretty much anything for the first hour or two of playing. Other than that, nothing more than the occasional bit of mild apprehension.
Silent Hill 2, like the first game, didn't do it either. Because I apparently have such a high threshold for artificial fear from entertainment products, I can't really accurately gauge the "horror" content of a game so I'm not even going to try, nor am I counting that against the game in any way. Silent Hill 2 is a Medal recipient simply because it's an exceptional story-based adventure game and such a pleasure to explore and watch unfold, and even gives you a lot of reason to return for repeat plays.
The first (and best) choice the writers make here is managing to retain the setting of the town of Silent Hill without also dragging along any of that "evil cult" nonsense that the first game wrapped up with. We start the game at a rest stop that overlooks the town of Silent Hill, in the shoes of our protagonist, regular guy James Sunderland. All we know is that James' wife died three years ago, but he's gotten a letter in her handwriting saying she's waiting for him at Silent Hill, a place they used to go on vacation (presumably before it got all foggy and monster-filled.) James' first goal is simply to reach the lakeside park, since he thinks that's the "special place" referred to in the letter, but of course in the style of the first game, there's gaping holes in the middle of the roads for some reason, so James will have to take some indirect path that involves finding items and solving puzzles to unlock doors and etc. The thing is, the story of the first game hasn't been abandoned, ret-conned or forgotten; if you're familiar with it, you can still see little points of consistency that enhance your understanding of this game, but you can also be completely oblivious to them and still enjoy the experience just as much.
That's the main strength of the game's storytelling, really - it's not afraid to let you miss things on the first go, and much of the enjoyment of Silent Hill 2 comes after the fact. Much of what seemed heretofore inexplicable or a throwaway element reveals hidden depth in light of the final act's revelations. Silent Hill 2 is laden with symbolism, and every little thing about it is planned and serves a purpose, but the game doesn't drag your attention to it or beat you over the head with cut-scenes and talking-head exposition. It's one of the (worrisomely) rare games that assumes the player is an intelligent and curious human being, not a Mt. Dew-fueled stimulus-response ameoba, and proceeds accordingly, slowly building an experience that only fully pays off once you've completed it and had some time to reflect on it, and then rewards you further by going back to it a second or third time, to see connections you missed the first time through when the journey was just a foggy, confusing haze.
The gameplay is in the mold of old "survival horror" games like the first one, but some concessions have been made to improve the experience. The "tank controls" are more responsive and quick than usual, but if you don't like them, they can be toggled off in favor of a more Onimusha-style movement system where you move freely in any direction at any time. You can also re-center the perspective in most screens and move the camera about in the style later used in Metal Gear Solid 3. What really negates any complaint about the "oldschool" style, though, is separate adjustable difficulties for both the combat and the puzzles. As far as combat goes, Easy makes the game a cakewalk if you just want to solve puzzles and enjoy the atmosphere and story without worrying about getting into clunky steel pipe duels with monsters. I think the Beginner setting even makes it so you can't die except in boss encounters. None of the combat modes actually reduce the amount of enemies, so you aren't missing any content, they just make them give and take less damage and scatter more or less health restore items and ammo around. Likewise, the "easier" puzzle modes just give you more explicit clues on how to solve the puzzle rather than eliminating or significantly changing them, on occasion maybe just eliminating a step or two from the process. Even on Normal I found the game much easier than the usual "survival horror", the only difficult part was at the very beginning when you only have a melee weapon. Once you get a handgun the game's combat almost becomes an afterthought provided you don't waste ammo (and take full advantage of kicking a monster when they're down to finish them off by releasing R2 and pressing X when next to them.) You get a healthy pile of ammo, more than enough to deal with all the indoors enemies and boss encounters comfortably.
One of the best bits is that the game has multiple endings which are not determined by how many trinkets you collected, but by the game playing amateur AI psychologist and gauging the way you play through various invisible means in the background. Though slightly clumsy, it's an interesting system. For example, if you run around with health items in your inventory but don't bother healing your damage for long periods, the game might interpret that as suicidal behavior on your part, leaning you further toward one particular ending. Of course, you might just be a goof who never bothers to check damage on the sub-screen, which is where the "slightly clumsy" qualifier comes in. But I thought it was neat on the whole.
Silent Hill 2 is one of those rare examples of what kind of unique and incredible storytelling experience games can be when a major publisher with a major budget sets aside the focus groups, marketroids and space marines and trusts in the taste and maturity of their audience. It's the type of experiment we used to see more commonly back around the Dreamcast/PS2 era but now seems to be going more and more by the wayside. But I'm not just artificially inflating the rating because of the high concept, the game itself actually has an engaging story and world that's fascinating to simply explore and think about.