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Various moments could qualify as this, but arguably the most well played comes when the survivors discover the creature's feeding ground, where it's excreted the gooey, skeletal remains of its hundreds of previous victims. The camera pans over them, the faint but clear sounds of these people's horrified final screams played over the music like a ghostly echo.
In addition, during the climax where a tentacle grabs Finnegan, shrieks in his face and then appears to quite vividly laugh at him, with a disturbingly human "HUR HUR HUR HUR HUR". While it might sound cheesy on paper, the dramatic directing makes it downright horrifying.
Billy's death.
Special Effects Failure: The creatures do look very good for the time, but whenever they're about to appear for an attack, it's quite obvious the actors are standing in front of a blue-screen for the effects work. This hurts several attacks that were clearly meant to be a surprise.
Visual Effects of Awesome: The creature itself was designed by Rob Bottin (The Howling, The Thing) with CGI by ILM and Dream Quest Images. There's also a scene with a half-digested Billy by Blur Studio.