I'd seen Kim Ji-Woon's The Foul King and liked it, but wasn't too impressed; A Tale of Two Sisters is a considerable leap in quality, with its fairy-tale ambiance and use of an evil stepmother. It borrows heavily from Ringu and The Sixth Sense, among others, but somehow still manages to come into its own, mainly because it's really a gothic drama with a story of its own to tell. Impressive use of atmosphere and setting (most of the story takes place in this beautifully shadowy house), plus the rhythms of a Korean art film, which seem distinct from, say, those of a Japanese horror film--more languid and mysterious, which makes the sudden moments of terror all the more startling.
Intricate plot, not entirely linear, which makes it hard to follow--but if you take the effort, the rewards are considerable (helps to see it on DVD). I like the way it unfolds its twists, raising as many questions as it answers; (SPOILER) unlike, say, the big one in The Sixth Sense, the first surprise is revealed about a little over halfway through, allowing the film to develop the consequent story, making it not just a surprise, but an integral part of the story and emotional arc (I like the way Kim foreshadows this in several subtle touches: the way the younger sister doesn't really talk, and the understated way Kim shoots the lakeside scene, so that you only see one pair of feet pull out of the water, next shot you see both girls looking down, shaking droplets off their legs).
The second surprise has a nice buildup (that long shot circling the suited figure) and Kim wastes blessedly little time in trying to explain it away. This second revelation is foreshadowed in several ways, the most obvious being the father's mysterious phone call, the most important being Kim's use of color. Green signifies the younger sister's presence and eternal innocence; red brilliantly (both literally and metaphorically) links older sister to stepmother--it's the color of their menstrual blood (they have their periods at the same time), it's the color of their clothes at one time or another, and it's the color of sexuality--their sexuality. Which is what presumably won the stepmother her husband (he replaced his sick wife with her nurse), and what's emerging in the elder sister (she identifies with the stepmother two ways: both were responsible for the younger's death, and both compete for the father's attention). The color red isn't just a key to the plot, it's a key to the characters as well.
It's this second surprise, in fact, that makes the shot where the stepmother lies with the father so disturbing--the father clearly wants sex, but the stepmother/elder sister coyly keeps her face away. (END SPOILER)
Excellent film; maybe only the fact that it relies too much on cheap scare tactics (Kurosawa Kyoshi's The Cure comes to mind of a horror film that doesn't rely on closeups or shock cuts) and borrows heavily from previous pictures prevents it from being a really great horror flick. That, and the fact that The Cure hints at a philosophy, a sensibility, where Tale is no more and no less than a ghost story well told.