I played RE 1 when it first came out. My setup is what helped scare me. 60" TV with 400watt surround sound system (modded with an amp that had 2 extra fans on it to keep it cool). Speaker setup is two 15's, four 10's, two horns and eight tweets up front. Rear speaker setup was two 15's, two horns and 4 tweets.
Played it in the dark with simulated surround sound (the original didn't support surround). I had anywhere from 4-8 people in my dormroom watching.
Needless to say, some people didn't sleep well for a few nights ;)