There's little I can say about Anchorhead that someone hasn't already beaten me to. All the hype is true. This is not just one of the greatest IF's but possibly one of the greatest pieces of contemporary mythos fiction.
When I first played Anchorhead, the First Day and part of the Second earned a few eye rolls from me, as much of them seem like no more than a Lovecraft Greatest Hits reel. Gentry is not subtle with his inspiration, and there's several moments where you'll encounter a character or location, and go, "Ohhh okay we're doing 'Shadow Over Innsmouth' now." Or "Ohhh okay the monster from 'Dunwich Horror' is here." Etc. It made me worried the game was going to be very predictable, standard Lovecraft pastiche.
I was wrong. Anchorhead takes these preconceived elements from Lovecraft's stories (and at least one Robert E. Howard story, 'The Black Stone') and carries them into wildly unpredictable, shockingly dark directions. And it does so very effectively. The protagonist is well-defined and likable, and you really fear for her as she finds herself in increasingly over-the-top horror scenarios. And while the story does go a little off the rails, it stays very stylistically grounded, and the puzzles stay dangerous, so you're never able to stop feeling that pulsing fear as you type in your next action, unaware of what cruel fate Anchorhead has prepared for you next.