Like 'The Blair Witch Project,''Paranormal Activity' traded on three things: the audience's desire to believe what we're seeing is true despite any evidence to the contrary, the fear of the unseen, and word of mouth that bolstered the pretense that the movie was actually made from found footage. 'Paranormal Activity 2' tries valiantly to follow in its predecessor's invisible and spooky footsteps, and it succeeds at times, but in the end it leaves us high, dry, and wide open for a third movie. What's strange, though, is the filmmakers' seeming reluctance to give up the pretense that this is all fake, even down to casting unknowns and not listing their names anywhere. Even the house and furniture look the same. This by-the-numbers attitude eventually filters down to a dissatisfying ending that literally left the audience shouting at the screen in disappointment.
Going from a movie made on an ultra low budget written and directed by one person, Oren Peli, to a bigger budget and a new, more experienced director (Tod Williams) and writer (Michael R. Perry) also allows the universe to expand a bit and let in new characters: a baby, a step daughter, a superstitious Hispanic nanny (seriously). The most interesting additions are the stepdaughter, who is just beginning to reveal herself as more than another silly teen, and Katie Featherston from the first movie, who is our protagonist Kristi's sister. You'll have to read more about 'Paranormal Activity' to get the background on Katie, but suffice it to say that including her makes the two stories dovetail nicely. This addition gives background to both the first and the second movies and fleshes the story out a bit, in anticipation, no doubt, of future movies down the line.
At the same time, a bigger budget and cast doesn't make it a more effective thriller than the smothering shock of the first 'Paranormal Activity.' Unfortunately, most of the focus is on the baby Hunter, who grows very quickly from a newborn to a toddler. Hunter is very cute, and it's hard not to get anxious when a potential threat is lurking around a little kid, but after a while, there's not much happening other than night footage of the family dog protecting Hunter from unknown forces, pots hanging ominously in the kitchen, and a pool cleaner with a mind of its own.

The stepdaughter would have been a prime opportunity to develop the story emotionally, but she's left dangling down to the very end of the movie. It's also frustrating that she's beginning to crack the code of what might be the root of the problem, but whatever explanation she, by way of the writer, has come up with is nothing all that exciting or fresh. The superstitious housekeeper/nanny who barely speaks English and is fired for doing witchy stuff around the house like burning a smudge stick to ward off evil spirits must be seen to be believed.

So, much like 'Paranormal Activity,' we have the sensible, no-nonsense, "I won't have this foolishness in my house!" fellow who is, in turn, surrounded by a gaggle of crazy ladies. Ladies, we are so attuned to the world of the unknown! Our sixth sense must reside somewhere in our ovaries. Because guess who's wrong? Sorry, dude. Your house needs way more help that a smudge stick.

The emphasis in 'Paranormal Activity 2' is still on the "found" footage and the night camera recordings, and the way we hold our breath looking for something to move in the corner of our eye. The movie has just enough about new characters and developments that we're left in limbo. Are we supposed to care about whatever happened in Kristi and Katie's past that they keep alluding to? Or are we just supposed to keep our eye on the rocking chair in baby Hunter's room? (That's not a giveaway, by the way; it's in the trailer.)

By the end, the answer seems to be neither. The novelty of people taping themselves and being taped 24/7 has worn off; it's like watching someone's home videos, and sometimes something really cool happens, and sometimes you're just looking at their front yard holding your breath, hoping something cool will happen.