I think The Oprhange is easily top five horrors of all time. Great acting, story characters and atmosphere so thick and brooding you can't cut it with a knife because you need a chainsaw. It's a heartbreaking human story that never fails to get to me and horror movies can very rarely convey such powerful drama to me. Here is a quote from Ebert's review (I know I quote him a lot but that's more because he words it perfectly and I don't want to plagerise, even if it's only on a forum):

Quote Originally Posted by RogerEbert
Now here is an excellent example of why it is more frightening to await something than to experience it. "The Orphanage" has every opportunity to descend into routine shock and horror, or even into the pits with the slasher pictures, but it only pulls the trigger a couple of times. The rest is all waiting, anticipating, dreading. We need the genuine jolt that comes about midway, to let us see what the movie is capable of. The rest is fear.

Hitchcock was very wise about this. In his book-length conversation with Truffaut, he used a famous example to explain the difference between surprise and suspense. If people are seated at a table and a bomb explodes, that is surprise. If they are seated at a table, and you know there's a bomb under the table attached to a ticking clock, but they continue to play cards -- that's suspense. There's a bomb under "The Orphanage" for excruciating stretches of time.
That makes the film into a superior ghost story, if indeed there are ghosts in it. I am not sure: They may instead be the experience or illusion of ghosts in the mind of the heroine, and since we see through her eyes, we see what she sees and are no more capable than she is of being certain. That means when she walks down a dark staircase, or into an unlit corridor or a gloomy room, we're tense and fearful, whether we're experiencing a haunted house or a haunted mind. And when she follows her son into a pitch-black cave, her flashlight shows only a thread of light through unlimited menace.
And this quote he ends his review which, for me, makes perfect sense to me:

You may be capable of walking into any basement on earth, but if you go down the stairs into the darkened basement of the house you grew up in, do you still ... feel something?
http://www.rogerebert.com/reviews/the-orphanage-2007

To me The Orphange is everything horror films should be trying to be. Where as Insidious is something I think horror films shouldn't be trying to be. Give me atmosphere and dread and foreboding that permeates an entire film anyday over most of what passes for horror these days.

I haven't watched the Devil's Backbone yet though I have it now. Been waiting a long time to watch Pan's Labrythe as well. I started going through his filmography chronologically, watching Cronos and Mimic then got sidetracked somewhere along the line.