I haven't played the later Silent Hill games (3 or 4), but there were some particularly freaky moments late in Silent Hill 2, and all along the way there was this increasing sense of dread and eerieness. I could go into detail about the time I nearly crapped my pants, but I won't at the moment (I'm at work).
I personally find Resident Evil more fun, but in terms of scariness, it could be a lot more. Sure, there's freaky bosses and swarms of zombies (or Ganado in 4), and the occasional "BOO!" but I think overall it's just not creepy enough. Like in Silent Hill, I think a lot more is left unexplained and what seems to be the case is more supernatural and psychological then biological. The Japanese title "Biohazard" already gives it away. I'm not saying a viral outbreak isn't scary, it's just not as WTF as some nightmarish weirdness. But again, I do find it more fun than Silent Hill and other horror games I've played, so RE fans shouldn't tear me apart, I'm one of them!
While I'm sure the controller is perfect for FPSes and may get the Revolution much needed support for this genre, I'm hesitant about series turning into FPSes. I'd still like more main Mega Man games (I'm not sick of them yet), and while a Mega Man FPS might be nice, I don't want to see the main series (or the more active X series, I guess) all totally turn into total FPSes.