I remember watching 1408 in the cinema, and found it to be a genuinely scary film. Admittedly, many of those scares came from jumpy moments, but then the horror would continue, unrelenting. I'm a bit of a fan of films based on Stephen King's work, as the characters tend to be carefully built and have real problems in their lives, and John Cusack's writer is no exception to this. This film is a testament to his acting ability that he can hold his own throughout the film while often being the only actor on screen.
However, this cut of the film isn't as tense. Some of the scenes are dragged out and lose their intensity. And the ending is different - about as different from the original theatrical version as is possible. It means that overall the film feels less scary and ends with less of a bang. In my mind, it doesn't feel like a Stephen King ending, though I don't know how the original story ended.
Bottom-line: It's an interesting horror film with some scary moments, and John Cusack is excellent in this. However, 1408's Director's Cut isn't as tense and ends on a bit of a poor note. Not a good horror film, but not a bad one either.