If you're looking for crappy, schlocky horror, I recommend April Fool's Day, which is basically just your average really bad 80s slasher flick, Meridian: Kiss of the Beast, which features a scene in which a gypsy turns into a werewolf while having sex with a woman that he just drugged, or Sleep Away Camp, which has probably the most ridiculous twist ending ever, both because it's hilarious and because it doesn't change anything about the movie whatsoever. Sleep Away Camp 2 - 4 are also notable; the killer is the same in each film, so there's no suspense at all, just a string of bizarre murder scenes.
If you want a truly horrifying movie, however, I recommend Pink Flamingos [http://www.imdb.com/title/tt0069089/], which was directed by John Waters. The MPAA rating actually sums it up remarkably well: "Rated NC-17 for a wide range of perversions in explicit detail." Everything about it is terrible; the writing, acting, editing, and production values are all so bad that you can't really meaningfully describe how bad they are. It starts off by lulling you into a false sense of security by just being offensively, appallingly badly done, and then BAM, there's a scene where two ugly people fuck with a live chicken in the middle. (When I say that, you probably think of sex comedies like American Pie, where the guy brings over the chicken and they murmur beneath the camera and you hear some clucking and then someone walks in and is shocked. That is not how this scene plays out. They put a camera on a tripod, point it at a couch with a naked lady, a naked guy walks over holding a chicken, and they start humping with the chicken squawking and flapping in the middle right there in front of the camera.) The chicken scene is not the last jaw-dropping scene in this movie, nor is it the worst. The main character is very obviously a fat guy in drag, but this movie is so fucked up that it's not even worth mentioning.
Somehow, I can't bring myself to dislike Pink Flamingos. I think it's because of the film classes I took, where I was told that documentaries are an attempt to put the truth on screen, always doomed to failure because the very act of filming something denies it context in its presentation. This film, however, succeeded in putting the truth on screen, and that truth happened to be that everyone involved in its production was completely fucked.
