When I was that age I had a slumber party and we rented a VCR (hooray!) and The Watcher in the Woods. By the end two girls had to leave the room and one had to sit on my mom’s lap. All I remember about it was that it was tense and scary (mostly due to the soundtrack, which uses a heartbeat throughout). It might be horribly cheesy, but could be fun, too.
Jesus Christ! Please do not let a seven year old watch Dead Alive (or many of the other movies listed here). Gah!
For seven, I’m thinking more The Watcher in the Woods, one of my childhood favorites. Maybe I’m just a square, out of touch with the kids these days.
(I actually quite liked Dead Alive, but I’m glad I was over 30 when I first saw it!)
For suspense, I liked The Ghost and the Darkness. What made it cooler was that I’d seen the Lions at the Field Museum in Chicago
That’s actually on my list of things to do, if I ever get the chance!
Like hell Poltergeist is scary. That movie is absurdly un-scary. When I saw it the other day, I burst into laughter at the ridiculous and poorly-aged CGI sequences. I don’t think any child would be scared by this film.
Other un-scary movies: The Ring 2. This movie is so incredibly boring, drawn-out, and not at all scary that I walked out of it when I saw it in a Michigan movie theatre - the second movie I’ve ever walked out of from boredom (the first was Man on Fire.) However, it would have enough suspense to keep a child happy (until he realizes that there is no punch line to the suspense and gets bored.)
Bad Taste. Peter “Fat Hobbit” Jackson’s directoreal debut, in which ass-faced aliens land in New Zealand. Rip-roaringly funny. More of a joke than an actual horror movie, but the kids will find it hilarious. I did, when I first saw it at age 12.
Marlitharn’s suggestion of Tremors is a good one.
Along the same lines, how about The Monster Squad? It’s got pre-teen heroes fighting the classic horror movie monsters. There are a couple of thrills and chills but it’s mostly fun adventure with some laughs.
Only one of them’s there right now. I’m not sure where the other is - probably on loan or being cleaned. They’re some damn big lions!
I really, really like Walloon’s list, with the caveat that The Ring and Jurrasic Park might be best left until you find out how they do with some others first. The Ring scared me, and I don’t scare easily! Jurrasic Park scares the piss out of little kids. They have this whole fantasy power trip over dinosaurs, and seeing what it might “really” be like is a big shock. Added to that is that Jurrasic Park is essentially a child abandonment nightmare story - all the grownups go away and leave them alone at a very vulnerable time. Scary stuff that not all kids are ready for. I always warned parents, and got quite a few who didn’t believe me, and then came back with the tape half-played, asking for a refund because their kid was traumatized.
I’d also add The Neverending Story, which isn’t horror but has some rather scary intense bits. The Watcher in the Woods was our most requested and rented scary movie for kids when I was managing the video store.
But I do have to put in a Busybody Public Service Announcement: clear all the movies with Mom first. You will be in the deepest of deep shit if the kids come back from your house with screaming nightmares about dinosaurs and she finds out you let them watch a movie she said they couldn’t! Don’t let them play that game! She’s the mom, she knows them better than you do, she gets to say what they can watch!
And you would be wrong. That was one that my son watched on a sleepover, and had screaming night terrors for weeks. I remember being scared by it when I was a kid. What scares kids isn’t always obvious, especially if you’re not a parent.
This really depends on the kids. Some kids will be freaked by ghosts and others boored. Blood may terrorize some and do nothing for others.
That said
The Lady in White
Anguish (kind of trippy)
Jaws
You know, they actually do make the occasional horror movie geared towards kids/family. You might be able to stand them too 
These two aren’t gory so much as “scary”, but I bet they’d like them:
More gory:
Dude, I’m going to tell you this ONE MORE TIME…then I release the chimps.
If a movie has a “wet, almost-nude Elizabeth Shue” in it, you mention that FIRST.
“Ghostbusters” has a few mildly scary moments, to say nothing of great jokes, unlicensed nuclear accelerators, and lots o’ slime. My 9-year-old son loved it (as do I).
One of those ‘how long is a piece of string?’ type of questions, this one. :dubious:
I’m biased against zombie-type movies for kids, mainly because movies where people get taken over by things (bodysnatchers, turned to zombies) freaked me out big time when I was younger. I dealt with werewolves, vamps and ghosts much better. However, my best friend *loved *zombie flicks but was scared witless by ghosts. It’s entirely down to the personality of the kid, so it’s really hard to recommend a movie for them.
That said, I’d be a little cautious with Shaun of the Dead. It’s really only comedy-horror for the first 2/3 or so, then it gets decidedly more horrory and pretty much humour-free, and ended on - if I recall correctly - a bit of a downer, really.
I would second Ghostbusters though. That’s a scary but not *too *scary movie for kids. Even my best friend - the ghost phobic - came through that one okay. 
When I was somewhere around the age of these kids, one of my aunts just *described * the guy digging the skin off his face in Poltergeist, and that messed me up for at least a year. YMMV.
As for Shaun of the Dead, don’t forget that His Mum gets zombified and they have to shoot her in the headThat’s like, *Bambi * times a thousand.
On the upside, show them a double feature of *Poltergeist * and The Ring, and they may never watch television again!
I was actually thinking of the part of Poltergeist that scarred me for life - the clown doll.
That horrific clown doll.
How about giant monster movies? There was a triad of Gamera movies put out in the mid-nineties that are absolutely great in every way.
The nice thing about giant monsters is that they don’t sneak into your bedroom at night and bite you on the neck.
I’d recommend Little Monsters wioth Fred Savage and Howie Mandel or The Frighteners. Both have strange charictures and weird happenings but all in good fun.
Thirteen Ghosts? I was disappointed with that movie because it was so tame but it might be good for kids. It is rated R but doesn’t deserve it.
I also second the recommendation of MST3K films since it will defuse the horror element with comedy, and will be enjoyable for adults. Some good (relatively speaking) monster movies they did that are available on DVD were The Crawling Hand, Manos: the Hands of Fate, and Eegah. I have also seen the unriffed movies available super cheap at discount stores, but you don’t want to give the poor things nightmares.
Gremlins!