I think everyone should see Funny Games. Actually I should change my statement to, "no one should be afraid to see Funny games." I just went and saw it last night and thought it was excellent. I love movies that leave you thinking afterward.
The thing about it is...everyone keeps asking "should I put myself through it," when really there is nothing in the movie that the majority of American moviegoers haven't seen in a typical rated PG-13 or R movie with violence. At least in its visual depiction. One of the misconceptions I see with this movie is that it is a "torture porn" movie and that you're going to see visually shocking things like you might find in one of the Hostel films or something to that effect.
I really do not think that is how this movie operates visually or in what it's about. Most of us have probably, in fact, seen WORSE than what is depicted in Funny Games...the point being that we see all kinds of death and violence in movies and are many times unaffected by the rapidly rising body count. People are offed with no affect at all, and brushed to the side. They are merely set pieces for whatever is the center of attention in the movie. This movie, however, brings it to a smaller and more intimate level and the only thing it "forces" you to do as a viewer is to observe a situation which is supposed to come off as very realistic. The intimacy of it...showing the pain physically and emotionally that people go through in times of danger, torture, loss, etc...is what makes this movie both powerful, and yes, painful to watch.
All that being said...don't stay away from this movie if you're just afraid of seeing visual depiction of gore. Like Adam and Matty said, the vast majority of the most brutal "happenings" occur off screen.
That's not to say show it to your kids or take a date to go see it, though. Hopefully my comments don't lead anyone to believe that this is a light hearted film or is not challenging. It is very dark and very heavy in tension. Which, in the end, made this a very interesting and cerebral movie...and for me at least a great movie to watch.