Don Coscarelli will always have a special place in the hearts of true horror fans for creating Phantasm, a wonderfully twisted tale of alien invasion, funeral homes, deadly flying steel balls and large scary men. That Coscarelli himself flogged the concept to death with three sequels is neither here nor there (and we liked Phantasm II a lot, as it happens) – he built the original, he made it run with seductive sweetness, and he created genre icons in the murderous airborne spheres and Angus Scrimm's Tall Man. What we've all been waiting for, of course, is for him to stop making the Phantasm sequels and create an original work that justifies the high regard in which he is held, one that moves him up a step to the exulted position as one of the Horror Gods. At long last that moment has arrived, and Coscarelli may step up for generic deification. Just.

Bubba Ho-Tep is based on a short story by Joe R. Lansdale and has the instant hook of a deliciously outrageous set-up. Elvis, it turns out, did not die of a cardiac arrhythmia after all. No sir. A while before his supposed demise he became weary of life at the top and secretly swapped places with the best of all Elvis impersonators, one Sebastian Haff. Unfortunately Haff had a weak heart and was even more addicted to the fast life than The King, rapidly falling victim to its excesses and leaving the real Elvis to carry on a contented life as an Elvis impersonator. That is until he fell off the stage and broke his hip, an accident that landed in him an East Texas rest home, where he effectively became a prisoner of his injuries and his new anonymity. Years later he is bedridden, has a possibly cancerous growth on his penis, and has his protestations over his true identity ridiculed by the nursing staff. When he and his closest friend – a dyed-black John F. Kennedy – discover that the residents of the home are being killed by a soul-sucking Egyptian Mummy, they decide that it is up to them to put a stop to the creature's monstrous feeding habits.

It's hard to imagine any real genre enthusiast not getting a litte bit excited by that outline, but before I get to what is great about the movie I have to address what for me is its principal weakness. The above may read as an introduction to the story, but, with the exception of the fine detail and the inevitable conflict with the Mummy, that's pretty much the whole plot, and a good deal of that is delivered in economical flashback. Where Phantasm took a seemingly simple story and developed it in a complex and intellectually satisfying fashion (the explanation for what is happening in the funeral home is a strong revelatory moment), Bubba Ho-Tep creates an intriguing and inventive situation and then plays it relatively straight, at least in narrative terms. Once Elvis and JFK have worked out what is going on – and the process of doing so is far from complex, with JFK doing all the necessary research off-screen – it's just them against the Mummy. There are no unexpected twists, no clever improvisations on the part of the heroes and, perhaps most surprisingly, a second use of a straightforward idea in a short space of time at a moment that cries out for a something new. In essence, Coscarelli has stayed true to the short story on which the film was based and has chosen not to substantially expand on it, with the result that the film feels light on narrative and is stuck with a climax that screams for some surprise revelation, some moment that knocks the audience sideways. After presenting us with so many great ideas in the first two-thirds, the finale doesn't really justify the extraordinary level of anticipation the build-up it creates.

However.

HOWEVER.

Yes, the narrative weakens a little in the final third, and yes, the climax would benefit from an unexpected and original twist, but just about every other aspect of the film is an absolute treat. And now that I have my reservations about the storyline out of the way, I can tell you just why I think Bubba Ho-Tep is one of the most enjoyable and imaginative American horror films in recent years.

First up we have the above-mentioned central premise. It has balls. In the 1970s, one of the key things that made a good many low-budget horror movies so enjoyable was the imagination and raw energy of their makers and cast, almost all of whom were doing it largely out of passion (let's face it, they were getting paid bugger all, working in impossible conditions on ludicrous budgets, and had only the slimmest hope that their films would lead to great things) and their faith in their material. Thus David Cronenberg could propose that a parasite was transmitting a mind-altering infection by crawling from person to person through any orifice it could find; Jeff Leiberman could suggest that a strain of LSD taken in the 1960s would ten years later cause its users to go bald and turn into homicidal maniacs; and Wes Craven could have a family of cannibals living in a Nevada wasteland prey on unsuspecting holidaymakers who had strayed from the highway. And we bought it. Every time. That's the beauty of horror – it can be outrageous, allegorical and challenging. As long as you set up and stick to the rules of the world you create, then almost anything is game. The tragedy of modern American horror movies, which have recently been restricted to limp remakes of Asian or even earlier US classics, is that they appear to have forgotten this. Coscarelli brings it back – to a degree at least – and gives his film a specifically American identity. Sure we have a Mummy of the old school, but he's a creature who is as much Texan as he is Egyptian.

Like its aforementioned 1970s predecessors, Bubba Ho-Tep was made on a miniscule budget. Exactly how much was actually spent is uncertain, as precise budgetary information seems oddly hard to come by, but in the making-of documentary on this very disc, Coscarelli suggests it was something in the region of $700,000, an astonishingly low sum for any shot-on-film movie today. Although this may account for the sometimes restrictive nature of the action – there are rarely more than three people on screen at any one time – it forces Coscarelli to abandon one thing that has, for my money, removed any sense of fright from modern American horror films: CGI. So Bubba himself is a guy in a suit and the scarab beetle that precedes him appears to run on clockwork, but their simple physicality at a time when actors are generally required to react to thin air so that an overly designed monster can be pasted in later is something of a thrill for us long-term genre fans. And Coscarelli's savvy use of camera angles and editing still sells both creatures as genuine threats, especially when Elvis comes under aerial assault from the beetle with only his bed-pan for defence.

Second up we have the characterisation, and here we have to discuss the casting. As if it wasn't enough to have such a great premise and the director of Phantasm at the helm, Elvis himself is played by one of modern horror's few acting icons – Bruce Campbell. Now Campbell has been the subject of many a debate amongst horror fans, and sooner or later the conversation will likely touch on the issue of Campbell's performances – although we love him, although just seeing him on screen brings joy to our hearts, although his commentary on the Evil Dead DVD is among the funniest and most informative I've yet heard, is Campbell really, honestly, that good as an actor? Or is it just the roles he has landed and the direction he has received that have pushed some of his performances just a couple of notches over the top, making him loveable but a bit hard to take that seriously?

For the record, I have for some time believed that the blame lies at the feet of the roles, the films and their directors. You want proof? Take a trip back to 1996 and the two-part episode Justice of the groundbreaking police series Homicide: Life on the Street. Campbell played Jake Rodzinsky, a detective whose son is murdered and whose killer escapes justice on a technicality, and it is one of the most beautifully underplayed and authentic performances you could hope to see. Campbell himself, in his hugely enjoyable autobiography If Chins Could Talk – Confessions of a B Movie Actor, describes this role as one of the most artistically satisfying experiences of his working life, and it's not hard to see why. I mention this in part because if you're a Campbell fan then you owe it to yourself to see him in that part, but also to counter comments I have read elsewhere on the Net suggesting that Bubba Ho-Tep showcases his first really great performance. It isn't his first. But, by thunder, it is great. For the most part barely recognisable beneath the old man make-up, the Elvis wig and the trademark sunglasses, Campbell's restraint in a role you would almost expect to be played to the gallery is remarkable. He brings a level of humanity that enlivens the subtext (more of that in a minute), makes every movement and look feel disarmingly real (just watch him struggling out of bed one night to take a dignified piss instead of using the bed-pan) and brings a subtle humour to the character that is light years from the crude slapstick of Army of Darkness. If you can't catch the Homicide episode, then this will effectively settle the arguments. Yes, Campbell is not just a horror legend, he's a bloody fine actor.

Matching him all the way is the great Ossie Davis as John F. Kennedy. Davis has a dignity, charm and an instant credibility that engages from the moment he first appears on screen. Though we are left in no doubt that Elvis is indeed who he says he is, JFK's true identity remains more uncertain – despite the racial switch ("they dyed me this colour!"), he displays none of the ex-president's mannerisms or vocal tics. The suspicion is, with his photos of Oswald and Ruby and his diorama of Deeley Plaza complete with motorcade and assassin, that he is what the nursing staff believe is true of Elvis, a man whose obsession with a famous figure has led him to assume his identity. It matters not a jot, as the two make for most engaging and unusual protagonists – in a world where movie heroes are expected to be young, athletic, fresh-faced and good-looking, any film in which the leads are two old guys who have to shuffle to get anywhere makes for a most refreshing change.

And then there is the screenplay. One of the key reasons all of the characters are so enjoyable, right down to the bit parts, is that they are so smartly written. Individual character detail aside, the dialogue is sometimes so funny and so wonderfully devised that just listening to Elvis pondering on his life or bantering with JFK is a joy in itself: the musings on what he'd like to do to his unfortunately located growth; the discussion about why a Mummy would need to sit on a toilet, let alone write Egyptian graffiti on the wall; the hilarious banter regarding JFK's Chocolate Ding-Dong; the apparently improvised moment when Elvis ends a interview with the hospital administrator (played by Coscarelli regular and good luck charm Reggie Bannister) with the line "I've got a boil on my pecker, what do I care?" – all these and more prompt open laughter and fond recognition on repeated viewings.

But not everything is played for laughs. Great horror is almost always allegorical in some way – the genre just lends itself to it, something key directors like George Romero, David Cronenberg and even on occasion John Carpenter (They Live was a direct response to his despair at the Reagan years) have recognised and used to great effect. One of Bubba Ho-Tep's most disarming strengths is its very up-front examination of Elvis's own regret at the things he has lost and modern society's attitude to the old. Mocked and neglected by the staff and visitors, mishandled and insulted even when dead by the funeral directors, the inmates of the home are left with little dignity, and the process of battling the Mummy becomes for Elvis not just a way to regain some purpose and self-respect, but a stand that must be taken for the elderly in residence. The Mummy is feeding off these people precisely because it so easily can – if a resident of the home dies then that's nothing new to the staff as that's what old people ultimately do. If the circumstances are unusual, then so what? These people are old and cranky and do strange things. If they are to be protected, to receive justice, then who better to dish it out than two of their own, legends in their own time who are now victims of their own decaying bodies and the disinterest of the young. With this increasing sense of purpose Elvis finds a new vitality and a revitalised virility, but it is still to Coscarelli's real credit that they two remain old men to the end and do not suddenly discover an elixir or youth to give them physical powers to match their determination – Elvis goes into battle against the Mummy not with an array of guns and super-powers, but a walking frame and a now-useless array of karate moves.

So even if Bubba Ho-Tep come up a tad light on plot, it is nevertheless to be treasured. The first half is loaded with ideas, the dialogue is a treat, the character detail just wonderful, and Bruce Campbell turns in, as David Hunter in The Hollywood Reporter described it, "a performance for the ages." Genre fans delight – The Independent American Horror Film is alive and well and living in East Texas.

For a seriously low-budget film shot on high-speed stock (which increases the film grain), the film looks rather splendid, at least in the transfer on offer here. The deliberately muted colour palette is nicely reproduced, and if the contrast appears just a little high in places it never harms the picture in any way. The higher grain of the fast stock used is rarely visible – the film's moody texture appears just right here, with solid black levels and generally good shadow detail.

The 5.1 mix is not an aggressive one but is nevertheless clean and nicely balanced, the main beneficiary being Brian Tyler's fine music score, though some key effects are very nicely directed to specific speaks (the biscuit tin that falls behind you when Elvis is taking a leak, for example, does a good job of alarming the unwary). Lower frequencies are minimal – the subwoofer will not be working overtime here.

Bubba Ho-Tep follows an increasingly pleasing tradition that sees movies with potential long-term cult status getting a royal treatment on DVD. Flip to the Extras screen and you'll be presented with a long list of options, many of which are substantial goodies, not the brief textual biographies that some would-be special editions pass off as key extra features.

First up we have a Commentary Track with director Don Coscarelli and star Bruce Campbell. My mouth was watering even before I listened to a single word, as Campbell's solo commentary on the Evil Dead DVD is far and away one of the best around, being hilariously funny and packed with information about the film. In partnership with Coscarelli he is a little more restrained, but notice I say a little – the two men remain highly enthusiastic about the project and have plenty of stories regarding the cast, the production and the short-cuts enforced by working on such a low budget, always great meat for aspiring film-makers and those with a fascination for production details. One of my favourites here involves the extra close-up needed of a the licence plate in the nearby river, which Coscarelli shot in his back yard using his daughter's paddling pool. There is, inevitably, some mutual back-slapping, but it's generally brief, good natured and, frankly, well deserved.

The Commentary by The King certainly sounds like a fun idea, being conducted entirely by Bruce Campbell as Elvis, but is actually something of a one-joke affair, with Campbell playing him as if he was the real deal and has just popped in to take a look at the movie. It raises a smile or two but never really develops into anything – Elvis takes calls from associates on his Nokia, talks about his own movie back-catalogue, disapproves of the strong language and sexual references and reacts to what's happening on screen like the sort of audience thickie I always seem to find myself sat in front of. The only laugh-out-loud funny moment comes early on, as Elvis bemoans the fact that people say he didn't take care of his body, and remarks of an old lady on screen – "We're about the same age....and I could kick her ass."

Joe R. Lansdale Reads From Bubba Ho-Tep has the author of the original short story reading from its opening chapter, accompanied by some non-anamorphic 1.85:1 still frame grabs from the film that have been run through Photoshop's watercolour filter. It's a useful extra, in part because it puts a voice to the name, but also for comparison with the finished film. Some of Elvis's musings have been transferred word-for-word to the screenplay, but some of Lansdale's more extreme description has been shied away from, and clearly made MGM twitch enough to add a disclaimer to the front of it. It certainly made me want to hunt down the original text to read the rest of it.

There are 3 Deleted Scenes, presented non-anamorphic 1.85:1. The first, Hallway (2:25), is accompanied by what sounds like Joe R. Lansdale reading from that scene in the book, which Coscarelli originally had as part of the film. The second, The Lady's Room, is just 45 seconds long. Both have optional commentary by Coscarelli and Campbell. Contrast is a bit heavy on these, but otherwise they are in pristine shape. Footage From the Temple Room Floor is the complete vision of ancient Egypt as experienced by Elvis on his first encounter with Bubba, but with some clapperboards left in.

Making Bubba Ho-Tep subdivides into four featurettes. The first, The Making of Bubba Ho-Tep, plays a little like an EPK in places, but at 24 minutes is a lot more detailed than that and is a decent look at the conception and making of the film. There are plenty of interviews with those involved, though they have been grabbed from a variety of sources (Campbell, for instance, is interviewed in two separate locations) and some of them seem to have been done with an on-camera mic in rooms with horrible acoustics. There is some useful on-set footage, and it's worth catching this just to hear the 50-year-old (but frankly much younger-looking) Ella Joyce talking about how attractive the 87-year-old Ossie Davis still is. The picture here is non-anamorphic 16:9. To Make a Mummy is a 6 minute look at the design and building of Bob Ivy's Mummy suit and make-up, Fit for a King runs for 8 minutes and takes a look at Elvis's costume design, and Rock Like an Egyptian is a 12 minute study of Brian Tyler's scoring of the film, built around an interview with him conducted by Coscarelli. All three are in the same style and all of real interest. The first two are non-anamorphic 16:9, with Rock Like an Egyptian 4:3. All are shot on DV. Photo Gallery consists of 70+ on-set and preparation-for-shooting photographs of varying quality occupying sometimes minimal screen space. There are a couple of goodies in here, but most are of only moderate interest.

Music Video is exactly that, a music video of Bryan Tyler playing the end theme from the film intercut with shots of the movie itself. As music videos go, this is spectacularly uninspired. The music's cool enough, though. Once again this is non-anamorphic 16:9. It runs for nearly 3 minutes.

The Theatrical Trailer is, you've guessed it, non-anamorphic 16:9, runs for just over 2 minutes and does a very nice job of selling the film both as a comedy and a horror piece.The TV Spot is a 30 second version of the trailer and just as nicely done. It's also 16:9 and non-anamorphic.

Other great MGM Releases features trailers for, good lord, other MGM DVD releases, though their status as 'great' is questionable in some cases (Barbershop 2, Jeepers Creepers 1 and 2), though there are trailers for Osama and Touching the Void. I don't think I need to tell you the screen format.

Bubba Ho-Tep is a rare delight nowadays, an inventive, original, low-budget American independent horror film, something to celebrate when most larger budgeted genre works are third-rate rip-offs of other movies. As a horror film it's serviceable, but as study of old age, of regret, of the process of looking back on our lives to questions the decisions we have made, it's a joy, and is without doubt one of the most inventive, original, well-written and played genre films of the year. At the time of writing the film still hasn't reached UK cinemas – personally, I wouldn't hang around, as this region 1 DVD has fine picture and sound and a very worthwhile set of extras, even if one of the most seemingly attractive falls flat on its face. The King is dead, baby – long live The King.