If you want to learn how to strike the right balance between horror and comedy, look no further than the 1970's classic Young Frankenstein which I have always considered to be one of Mel Brook's finest film. I have seen it so any times I can spout endless quotes from the movie. It still brings a smile to my face every time I see it.
Young Frankenstein is a parody that draws heavily from the 1930's classics The Bride of Frankenstein and Son of Frankenstein. Mel Brooks was smart enough to film it in black and white and even captured the feel of those classic castle sets perfectly.
Everything, and I mean everything, about this film works. It's comedic timing is brilliant. The pacing is perfect. The soundtrack is wonderful. And the cast...oh, the cast, is as good as it gets. Gene Wilder is Dr. Frankentein, which he pronounces [fronk-en-steen]. Peter Boyle is spot on as the monster and the rest of the cast is brilliant as well. I especially love Kenneth Mars' interpretation of Inspector Kemp. Go back and watch Son of Frankenstein (1939) and look for Lionel Atwill's Inspector Krogh. You will appreciate what Mars does in Young Frankenstein even more.
I could gush about this movie forever but I'll stop for now. If you haven't seen it yet, what are you waiting for? It just doesn't get any better than this.
For more info check out the episode's entry in IMDB.