Why are you so sure that the city is not sentient? There are strange ancient powers (gods?) there. (Aside of the God). The city seems to atract people in there, or at least is my impression, plus, how do you explain certain things, like the trick or treat show in SH2 or the ride of Heather through the horror house in SH3. It is like something was playing with them. If they survive good for them, if they dies, it's over.

We're pretty sure the town's not sentient because it never demonstrates any kind of will, desire, motive, or intent. It's entirely passive and reactionary, manifesting only what's in the minds of the people visiting it without giving any sort of interpretation to it. The fact that the city attracts people doesn't mean it possesses awareness either. Ever heard of magnets?

The Trick or Treat Show and the Horror House are being run by people. Either living people, dead people, or imaginary people being conjured up by James or Heather.

It's like a mirror: it can only what's there in front of it, but it's the person seeing that reflection who ultimately interprets what they're seeing. You look in a mirror and see your reflection, but if you think you're ugly, then that's what you'll see in the reflection. If you are able (and willing!) to step back and say "wait, now- am I really ugly, or am I in a bad mood and just trying to punish myself and make myself feel worse?" then you can make yourself realize that you're not ugly and see yourself in a healthy way, as you truly are. If you just sit there and cry because you hate yourself for being ugly, then you get anally raped by the vaguely phallic representation of what you perceive to be your ugliness.

...Huh. I think I'm proud of that analogy.

Or they're automated. I know many tricks in carnival haunted houses are triggered by motion sensors.

I have the following to put forth:
2nd game-But how can something that was automated unlock all the goodies James gets for answering right?
3rd game-I've never known a haunted house attraction to feature a red lazer that actually killed the guests.

2nd game- Do you believe that when you put a selection in a vending machine, there are chipmunks- or perhaps tiny little men- running around within, making sure you get that bag of Doritos? Or is it possible it's simply programmed to do so?
3rd game- Don't be dense.

2nd game-OMG! I KNEW IT WAS CHIPMUNKS!!! <3 Doesn't he get them from a free standing safe or something?
3rd game-I'm just sayin' that when you play on the right difficulty, that house killz the bitch. I don't see how BHM could only be automated if Heather can die. I know it's otherworld side, but that just always bugged me.

Probably because he expected it to open. The otherworld is supposed to be susceptible to thought or something, so if he was certain he got it right, then voila! It opens. And yeah, I realize any other answer doesn't open it, so I'll just assume he wasn't so sure about the other answers. >_>

It's because it's the otherworld the red light is there and fatal. Of course there wouldn't really be a killer red glow in the real haunted house. Bad for business. Alessa or Heather or whoever probably just has a major thing about red glowing lights in Haunted Houses, hence why it's there. I can't really think of any other explanation. I realize my answer for both are pretty silly, but that's the best I can come up with. I think it's plausible given how the otherside supposedly works.

Well, not really.
There's no way we're gonna get a clear-cut answer about BHM or Trick-or-Treat, so all we can really do is drive each other insane with theories like this.
I said in Dooglas's thread that t-o-t may have been Jame's own little episode of M.A.S.H. (He was manifesting something ridiculous and game-like to relieve the tension, blah blah)
It's just one of those little details that always bugged me. Like in 4, also, when one of the hauntings was a possessed Henry outside the door. It felt so out of place for some reason. Why would Walter conjur that? Wtf?

Because Walter wanted to freak Henry out and show him what he would become if he wasn't careful? Or rather what he wanted Henry to become...

I'm guessing she was her own punishment, she didn't need a Pyramid Head like James did.

It can be on a track that simply runs all through the hallways and changes direction based on motion triggers. There's just no reason for the BHM to have people running it in the background, just like there's really no reason to hire more people to sit in a carnival haunted house and run the thing when it's cheaper to just have it automated- doubly so since it's SH and it seems very unusual for people to find themselves in the Otherworld. I can't see people being called to the town just to run the rides.

Don't forget, the merry-go-round became a sort of living monster itself. Why not the haunted house?

I think it would be interesting to see a Silent Hill where each character has their own punisher, and each punisher is a boss for the main character to face, a bit like Persona 4 but darker and scarier and less obvious.

You just described SH:H.