I saw this film last night, and other than making me glad that America has pretty much no spirit world (but don't quote me on that), I thought "Man this would be great for a LF game set in Japan" or something of that sort.
What do you all think?

Well I watched this film last night as well. Very well done flick that would work great in a LF game. Maybe something along the lines of a group of friends going to the spirit world after a friend was taken there against their will. A lot of the visuals seem really cool to use in a LF game as well. The three rolling heads, the hopping lamp, the attacking paper birds, etc.

From what I've seen of the film, it sounds like this would be a great take on Arcadia. Or, perhaps the group of PCs gets stuck inside some child's dream? Perhaps one of their friends slips into a coma and the kids do some ritual and are transported into the friend's dream-land where they hope to rescue him and bring him out of it?

I hope to see this movie soon.