I think the fear comes from, as you said, the use of the child's innocence. When we think of fearful images, we are more likely to imagine something grotesque or horrific...but the idea of a child, young and innocent, isn't one that comes to mind. Then, a child is used in a way to create a scare, and it scares us even more because it is the embodiment of innocence that has been corrupted, has been turn into horror

i mentioned it in the  horror games thread.  rule of rose is all about a childs innocense. its has a very complicated story but thats actually a good thing. everything about that game is about children. it really shows how innocense doesnt neccesairly mean good.

the gameplay is horibble though. not as bad as most reviews say but still horibble. i still would recomend it for anybody who wants a good interesting story and ESPACIALLY if you want something so specific like horror that uses a childs innocence (i think i spelled that word differently like 3 times already :S)

It creeps me out when a little kid is singing a song and have no idea that it is talking about something horrible. Even worse is when you remember singing that song. There are some nursery rhythms like that too. And urban legends like slender man and bloodly mary told by little kids creeps me out too. Not because they scary but because of how unscary looking the kids are. It's like they're so unaware what the songs or rhythms means.

Slender man isn't an urban legend, he was made up not too long ago. They're all made up, but Slender was really obvious so to speak.

Are we talking about The Lord of the Flies where a gang of boys gets stranded on a desert island and horrible things happen, or the MIdwitch Cuckoos where a number of women are impregnated by aliens overnight and the children are very frightening, or the Omen, where the son of the US ambassador is not as innocent as a child is expected to be.

The Omen kind of horror.