Once again, Guest Horror Chick Meghan stepped in to cover this one for us. Here’s her review:
Paranormal Activity 3 is a prequel to the first two PAs and is by far the best of the bunch. After watching PA1, I thought, “OK, that was just silly”; after PA2, I thought, “OK, this is a bit more scary”; and after PA3, I thought, “Okay, I may actually have nightmares tonight.” Fortunately, I didn’t (but consider yourselves forewarned).
For those who haven’t seen Paranormal Activity 1 or 2, both films are cut together with supposed home videos taken of sisters Katie (Katie Featherston) and Kristi (Sprague Grayden) and the members of their household… including some extra, ghostly members that are not just there for punch and pie. Without delving too much into the first two (or spoiling anything for those who plan to catch up), the PA3 prequel focuses on the much younger Katie (Chloe Csengery) and Kristi (Jessica Tyler Brown) and the events that lead up to their future paranormal scare-fest. The two girls live with mom, Julie (Lauren Bittner), and her wedding-videographer boyfriend, Dennis (Christopher Nicholas Smith). As with the first two movies, PA3 starts with your seemingly typical home videos of two little girls. But when Dennis starts noticing that something seems amiss, he starts monitoring life in the house more closely – and soon discovers that Kristi has an imaginary friend named Tobey that is an all-too-real demon. 
In PA3, the haunted presence is much more invasive and aggressive and the action begins almost instantly, unlike the other two, which I found kind of dull the majority of the time. While there are plenty of moments that make you think “there is no way you would have a camera on during this conversation,” the conveniently cut together scenes are chilling none-the-less, and the home video novelty still adds that real-feeling factor that amps up the scare factor. The trailers are very misleading (i.e. false advertising), as a lot of what’s in them didn’t make the final cut. And while the last 15 minutes are dig-your-nails-into-your-date’s-arm chilling, they will not “mess you up for life” (unless perhaps you’re really messed up to begin with).
Overall, Paranormal Activity 3 is the best and most exciting of the series. So if you’re looking for a horror movie that’s actually kind of scary this Halloween, check it out.
Paranormal Activity 3 is rated R for some violence, language, brief sexuality and drug use.
P.S. A lot of folks opted not to wait for Halloween. The low-budget PA3 scared-up a whopping $54 million in its opening weekend at the box office – making it the biggest October movie release ever. Yikes!