Eli Roth's Hostel is provoking some of the most hyperbolic critical reactions of any recent horror film, so it will probably surprise you to learn it is no more extreme - and a great deal more thoughtful - than most of its genre.

Roth, who directed 2002's clever shocker Cabin Fever, is an interesting mix of panderer and provocateur. He knows the obsessions of his core audience (primarily young males), but he also knows their worst fears and prejudices, which are not all that different from those of America as a whole. Hostel is, on one level, your standard slice-and-dice bloodbath, fixated on the boundary between power tools and human flesh, but it's also a startlingly brazen attack on America's sense of entitlement and casual exploitation of poorer countries. In other words, this is a revenge movie, which makes us the despicable, deserving victims.

From the start, Roth ensures our complete lack of sympathy for his hapless protagonists - American backpackers Paxton (Jay Hernandez) and Josh (Derek Richardson) and their Icelandic pal, Oli (Eythor Gudjonsson) - as they traverse Europe with but two goals in mind: getting high and getting laid.

Racist, homophobic and misogynistic, the guys pursue Amsterdam prostitutes, beat up local boys and hunt feverishly for greater thrills. Europe is nothing more than an amusement park where every ride can be bought, so when they hear of a hostel in Slovakia bursting with sex-starved beauties - a nice change from the sweaty socks and gassy roommates one normally encounters while hostelling - they can't get there fast enough. On arrival, our heroes are greeted by semi-clothed babes and a hot-tub invitation ("I'm so glad I shaved my balls," sighs Oli, with customary class) and, for one night, ignorance is bliss.

Shot in the Czech Republic for just $4 million, Hostel is filled with bombed-out warehouses, dank alleys and gangs of feral street kids ready to beat your brains out for bubblegum. The horror, when it begins, is unnervingly sadistic, but no more so than that of Saw, or Audition, or any number of mutilation movies. Much more to the point is Roth's depiction of a world where, outside the oasis of the hostel itself, everything is crumbling and every foreigner is ugly, disgusting, or weird (sample end credits include "Toothless Cab Driver" and "Angry Dutch Elf"). Yet the film's rampant xenophobia, while offensive, is a great deal more shrewd than most critics will allow. Roth deliberately presents it as a product of economic inequality and First World arrogance. Even the movie's repetitive images of dungeons and torture are uncomfortably reflective of our evening news.

In Hostel, the rich exploit the poor until the poor fight back - which may be our greatest fear of all.