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By Hollywood standards, the "The Blair Witch Project" is shockingly Lo-Tech, employing none of the expensive techno-tricks that increasingly overwhelm movie after movie. But the BWP, thumping expensive hi-tech competitors like "The Haunting" and "Deep Blue Sea," uses technology brilliantly, if minimally, in its making and marketing. Here's to a new Lo-Tech genre in cinema.

"The Blair Witch Project" is a biting rebuke to Hollywood, which has nearly overwhelmed movies from "Phantom Menace" to "Wild Wild West" with expensive cinematic technology, especially computer-generated special effects.

The BWP, made for roughly $50,000 by two young and unknown filmmakers - Eduardo Sanchez and Daniel Myrick - might well spark a new Lo-Tech genre in American cinema. It sure ought to.

As of last weekend, the BWP was the No. 2 money-making movie in America, taking in $30 million. It is pounding the daylights out of big-budget Hollywood clunkers like "The Haunting and "Deep Blue Sea," both of which spent small fortunes on razzle-dazzle effects but forgot to include the rest of the movie.

In fact, the "Haunting" has grossed half as much as the BWP even though it cost at least a hundred times as much to make.

It wasn't that the BWP makers didn't understand or make use of technology. They did.

The movie's website www.blairwitch.com had more than 20 million hits even before the films release this summer in a handful of theaters in a small number of cities.

The site is a model of how to use the Web to capture the style and atmosphere of a film.

The movie is set in a tiny (real) town in Maryland. The (fictional) premise is that three student filmmakers set out into the woods in October of l994 to film a documentary about the Blair Witch, who supposedly has haunted the woods for generations. The kids never come back. A year later their video footage is found. The website presents the story as a literal news event, including newscasts reporting on the kids' disappearance and the search for them and their remains.

Sanchez and Myrick shot the movie with tiny hand-held cameras, one of the many reasons the BWP is so edgily effective. They used Global Positioning Satellite tracking systems to guide the three unknown actors in the movie to their locations in the woods, where they found instructions on the movie's upcoming scenes. The actors weren't told what to say, but required instead to improvise the dialogue and much of the plot. Watching the movie, it's easy to forget you're watching one.

Thus the actors were especially convincing as terrified kids in way over their heads. The WBP is, from the first, permeated with an overpowering sense of gloom and dread reminiscent of the original "Night Of the Living Dead," one of the best and most innovative horror films of its era. I've rarely seen a theater so quiet.

Using technology in this savvy, minimalist way, the BWP reminds us that movies can be much more frightening when they leave some perils to our imagination than when they present them so literally and ultra-graphically (one of the many reasons "Jaws" was so much creepier than its lame sequels).

In fact, the BWP did none of the high-tech things that now seem elemental in contemporary movie-making. It had no score, not a single special effect, almost no lighting, no expensively animated credits.

For the past few years, filmmakers have been drunk on all of their new technologies, from computer-generated characters to numbingly overdone explosions and crashes. The early mythic horror films - "Frankenstein," "Dracula," "The Phantom of the Opera" - were much closer to the BWP than to the gazillion-dollar bombs now produced by the corporatized studios: they were much more frightening for what they didn't show than for what they did.

Sanchez and Myrick may, in fact, have almost single-handedly saved an endangered Hollywood genre. Their movie was made completely outside the Hollywood studio system, discovered when shown out of competition at the Sundance Film Festival (it wasn't even accepted as an entry ).

Had it been a Hollywood project, it would probably have had almost none of the qualities that make it so strikingly original - the realistic, amateurish, herky-jerky home video quality, the restraint and discipline that force us to picture what might be happening.

And a big studio would never have signed Heather Donahue, the previously unknown actress who delivers a grand-slam performance as an obsessive young documentary maker. Nor would a studio have permitted a film to be made without a script.

Yet without sophisticated use of technology, the BWP wouldn't have been nearly as effective. GPS systems permitted the actors to move around without a horde of techs and aides, something which clearly contributed to their performances as increasingly terrified kids alone in the woods. In the first minutes of the movie, the kids are much more worried about returning their car and camera equipment in time than about being lost in the woods with any supernatural skullduggery. That changes quickly.

Digital technology makes possible small and highly portable cameras that can be wielded by actors as well as cinematographers. And the movie's amazing online campaign shows that creativity can do wonders on the Web while giant and overblown corporate ad campaigns stagger and fail. The Web is profoundly anti-hype. The product has to deliver, and Webheads prefer to find it for themselves. People online want to find something good and share it, not be beaten over the head with it. Online marketing reverses the natural laws of conventional media hype. If you make it, and it's good, they will come.

The good news is that "The Blair Witch Project" advances the campaign of techno-savvy, creative, young and poorly-funded filmmakers against a corporatized film system that embraces technology but smothers originality. The bad news is that a sequel to BWP has already been contracted by a Hollywood studio.