Like The Ring, The Grudge is a remake of a Japanese horror film that's spawned an entire franchise in its native country. Unlike The Ring, and most Americanized versions of foreign films, The Grudge has the same director as its overseas counterpart. Takashi Shimizu, who both wrote and directed the original film and its sequel, helms the American version (although since he doesn't speak English, he didn't write the screenplay). This means that the atmosphere is creepy and will make you jump, even if the story doesn't make a whole lot of sense.
The dedication to re-creating Shimizu's original is striking, although it does make you wonder what the point is. This new version is even set in Japan, with most of the main characters changed to expatriate Americans. At the center of the story is exchange student Karen (Sarah Michelle Gellar), who volunteers as a caretaker for housebound patients. Her first solo visit finds her at a mysterious home where some sort of apparition appears and perhaps literally scares Karen's patient to death.
As Shimizu moves back and forth in time, we learn the house is cursed by a murder-suicide that occurred there years before, and Karen must connect the dots of the past crime to figure out how to stop the ghosts of a mother and child who are haunting everyone who has ever set foot in the house. Those dots have something to do with a college professor (Bill Pullman), an American couple (William Mapother and Clea DuVall), the murdered woman (Takako Fuji, reprising her role from the Japanese film) and the belief that when a person dies in rage, that rage carries on past their death.
At least that's the theory. In reality, none of the dots connect at all, and you're left at the end with no better understanding of the reasons behind the terror than you had at the beginning. If Shimizu weren't so skilled at creating fear and unease, The Grudge would be merely another nonsensical horror flick. But within its muddled structure are moments of pure terror, orchestrated with cold, deadly precision. Those moments, along with Shimizu's visual style of muted grays and blues (very similar to the look of The Ring), carry the film, even when the story and the generic acting do not.