I remember reading It when I was a kid. It took me something like 6 months. One, because it's like 1000 pages long. Two, because it scared the crap out of me and I would just read it during the day, preferably surrounded by friends and family.
I don't know if it's the "scariest" but The Shining is awesome beyond belief. So is Silence of the Lambs. Those are just great films that are scary to a degree. Add Manhunter by Michael Mann to that list. Not really a "horror" movie, but great movie about a guy killing people. As for scary, yeah Candyman freaked my stuff out. Henry: Portrait of a Serial Killer is a scary movie. The original Halloween is also really scary and the original Omen, IMHO.