Lady in White (1988)

  I think we all have at least one movie from our childhood that scared the everloving crap out of us.  For me, it was Stephen King's It when I was about five.  For Christy, it was this one.  She saw it when she was about 9 and it gave her nightmares.  The effects are complete shit, now, but the story holds up surprisingly well.  I think if you have to baby-sit a kid around the age of ten-years-old, this would be a good one to traumatize it with.

Frankie (Lukas Haas) gets locked in a school coat room on Halloween and witnesses the ghost of a young girl re-enacting her murder.  Later, the murderer actually shows up in order to try and find a piece of evidence that had been left at the scene and finds Frankie instead, choking him nearly to death.  He is rescued and the school is searched.  The only person inside was the janitor (Henry Harris) who is arrested and charged with being Present While Black.  Frankie doesn't believe the janitor did it and thinks the whole thing ties in with the local legend of the Lady in White, a ghost that supposedly haunts an abandoned cottage on the cliff. 

This was independently made and it shows, but it adds to the effect rather than detracts, giving a realistic feel to the characters.  It's not polished but it's far from first-year-film-student.