It's hard to go deeply into the story of In the Mouth of Madness without spoiling it. It's best to know absolutely nothing at all. That was my experience with this film and I was completely blown away. The story is very original and inventive and also has a good critique about the influences of the horror franchise.
The first 2/3 of the film are masterful, the old John Carpenter seems to have returned at full force. Effortlessly creating a creepy atmosphere, astounding visuals, some gross-out horror combined with a Chandleresque detective mystery, In the Mouth of Madness seems to be competing for the title of Carpenter's best ever film. But the final third is a letdown, the conclusion not satisfactory and the terribly slow pacing kills the momentum so memorably established before.
Still, overall this is one effective horror film made by a master filmmaker. Although it misses the bull's eye, it ranks as the best of Carpenter's later works. He has a good cast to work with here; Sam Neill is terrific in the lead, Jurgen Prochnow is creepy and it's fun to see Charlton Heston in a small role.
For horror fans and Carpenter disciples this film is a must see.