The most famous "found footage" film begins with the words, "In October of 1994, three student filmmakers disappeared into the woods of Burketville, Maryland while shooting a documentary. A year later their footage was found."
Thus began the Blair Witch Project, a movie Roger Ebert called an "extraordinarily effective horror film." He also called it a "celebration of rock bottom production values" for its rough hewn camera style and effective no-budget scares.
Those are trademarks of found footage-style movies. The premise is almost always the same: someone has recovered film left behind by, as Wikipedia says, “missing or dead protagonists,” and pieced it together to tell a (usually) horrifying story. This weekend, Apollo 18 uses (fictional) found footage from NASA's abandoned Apollo 18 mission to reveal the reason the U.S. has never returned to the moon.
In the wake of Blair Witch, theatres were overflowing with found footage movies, partially because they’re cheap to make, and partially because audiences raised on reality television seemed to respond to them. Movies like The St. Francisville Experiment, The Last Horror Movie, September Tapes and The Curse tried, most unsuccessfully, to cash in on the box office bonanza of Blair Witch, but [Rec], a Spanish horror film about a haunted building was the most successful, artistically and financially. If you missed the Spanish version you can always check out the shot-for-shot remake, Quarantine, starring Dexter’s Jennifer Carpenter.
Less successful but interesting is Redacted, a Brian De Palma war film shot through the lens of one of his characters. De Palma came up with the idea when he was asked by HDNet Films to make a movie for $5 million on HD. In creating the story of U.S. soldiers on a revenge rampage after one of their friends is killed by an IED, he earned the ire of many conservative groups who called for boycotts of the film and producer, Dallas Maverick's owner Mark Cuban.
If the Blair Witch Project and Paranormal Activity are the commercially successful of the genre and Redacted the most contentious, the most controversial must be Cannibal Holocaust. The 1980 fake cannibal found footage doc that was so convincing the director was arrested and charged with murder. Police believed several actors had been killed on screen but charges were dropped when the actors showed up at the trial, safe and sound.