This film, originally known as Das Cabinet des Dr. Caligari, is a true classic of horror cinema. True, silent films can at times be hard to get into - I perfectly understand that. And this movie's not perfect.
But here's what it does have: 1) An interesting plot, which brings to mind films such as Murders in the Rue Morgue, 2) Impressionist set pieces, which look somewhat tacky, but also pretty cool from today's perspective. 3) You got some good actors, especially Werner Krauss (who plays a fantastic Caligari) and Hans Heinrich von Twardowski (who looked surprisingly like Matt Smith's incarnation of The Doctor). 4) Lastly, you, believe it or not, have some plot twists, which come as a pleasant surprise, especially from a movie this old.
As aforementioned, Germany used to be one of the best countries insofar as producing horror films at the time (this film, Nosferatu from 1922 and Der Golem, wie er in die Welt kam from 1920, are the three pillars of horror in the early 1920's, as far as I'm concerned). Many of the existing prints out there are pretty bad - blurry, scratched up, what-have-you, but I found a really clean print, in it's natural German with English subtitles. Only problem is it had no score. Oh well, you can't have everything. A very good movie, and definitely one of the finest silent horrors out there.