I first saw this film when I was 11 years old and it plain scared the shit out of me.  I remember being afraid to go into the basement for weeks because it was dark.  There was so much hype about this whole story at that time.  You could not go more than a few days without a debate on television as to whether the story was true or not.
This is, by today's standards, a pretty tame movie overall.  No real gore like the standard in R rated horror films of the last decade is seen.   In fact, I doubt that this would be rated any worse than PG13 today.  What the movie did have was the ability to really scare the audience.  This movie has to be ranked high on the all time list of movies that are just plain creepy.  In fact, there have only been a handful of movies that I have seen that measure up on the skin crawling scale.
The story is very basic.  A family moves into their dream house and realize very quickly that the house is haunted.  At first, it is only basic weirdness such as flies in the winter and items moving.  However, by the end of the film , the walls ooze blood and the haunting appears to pose a physical threat to the family.  The demonic spirit appears to be trying to possess each family member.  Even an attempt to exorcise the demon fails, with the priest losing his vision and then experiencing serious health problems later.
The pig's eyes (Jodie) in the window nearly cause me to have a stroke at age 11.
We learn that the house was the site of the DeFeo murders.  A young man killed his entire family in a brutal fashion.  The house sits empty for a period of time and then is purchased by the subjects of the film, the Lutz family. 
The family continues to experience increasingly more annoying and dangerous threats, but for some reason, stay a hell of a lot longer than I would have.  This ends with the family finally relenting and getting out.  It spawned a number of other movies that just did not measure up in terms of acting and story.
I doubt that there are many horror fans that have not seen this one.  It truly is a classic.  To this day, many people argue that the story is true.  I don't believe it to be true, but it is certainly extremely effective in the scare department.