Does anyone remember the nightmare level from the original Max Payne? I'm not entirely sure it's relevant to this thread, other than I was reminded of it reading the earlier posts. To this day, I still rate that as one of the all-time great ideas in a game. The claustrophobia of the walls closing in, the perspective tricks that made you question what was real, the constant sound of a baby crying always close at hand yet always just out of reach etc You were driven forward into the nightmare not because you were being pursued but because in a strange way, even knowing the baby wasn't real, you wanted to try and save it anyway. A carrot instead of the stick
Of course in Max Payne it was the map, the hallway really did narrow even if the perspective tricks made it look normal from a distance. If Amnesia is using a 'sanity meter' then it can't rely on physical environment tricks like that, or can it?