Yeah, between the hours of 2.30 and 4.30am are the proper time to watch this. My house has birds in the roof (who wake up and start making noise above my room around 4am!), and there are often enough peculiar noises in one room or another, so regardless, it was an unsettling setting to watch in. Upon hearing the updates and seeing the trailer for the sequel, it looks really really really awful. I did enjoy the first one quite a bit, but I usually appreciate any low-budget film that achieves its goal, as that is what i would like to be doing in the next few years.
Also, I would like to universally give the finger to people that watch scary movies at 3pm with all of their friends and then talk about how they aren't scary.