Trivia: At one point before the film was widely released, the studio was interested in remaking the film with a larger budget and more well-known actors, and including the original version of the film as a DVD "special feature." Thankfully, this idea was eventually shot down, and the original version of the film was released in theaters.
Trivia: The entire movie was filmed in Oren Peli's (the director) home.
Trivia: As part of a marketing gimmick, the film wasn't going to receive a traditional release. Instead, audiences could click a button online to "demand" their local theaters get a copy, and once an area got enough "demands," a copy would be shipped there. This was done because the studio was worried they wouldn't make enough money if they did a wide release. So many people ended up "demanding" the film, that the studio eventually caved and gave it a wide release. It became a massive hit.
Trivia: When the movie was being shopped around for a distributor, Steven Spielberg was given a copy. He loved the film and found it absolutely terrifying, and agreed to distribute it through Dreamworks/Paramount. He also made one major contribution to the film - the theatrical ending, which differs greatly from the original director's cut ending. He felt the original ending was too closed off, and that a more open ending would not only be appropriate, but also leave the door open for potential sequels. Director Oren Peli shot the new ending at his suggestion, and the rest is history.
Answer: The screenwriter confirms in the commentary that burning the cross and picture was a mistake because it was the last defence they had.