No, Dead Space wasn't "scary" - as Yahtzee pointed out in his review, all the game does is jump out and yell "BOO" at you every 5 minutes or so; there's no pacing, nor is there anything psychologically scary about the game itself - I liked the atmosphere of the game, although it was painfully unoriginal, but as far as "scary" went, Dead Space scored very low in my books.
And I'm not going to quote the guy above me as I don't want to get into an argument, but Silent Hill 2 was WAY SCARIER than Dead Space - the thing with Dead Space was after the baddies were gone, you weren't scared anymore. Silent Hill 2, on the other hand, maintained this consistently creepy atmosphere that stuck with you throughout the entire game.