I have a vivid memory of watching Labyrinth as a kid. I remember sitting on the floor of my parents' bedroom looking up at the TV. However, I don't really remember much of the movie - not plot nor characters. What I do remember? That muppets can be horrifying.
I just recently stumbled upon it again on Netflix, so I watched. The verdict? Still horrifying, if not for a host of different reasons. David Bowie, anyone?
If you're interested in a more high-brow version of the story (i.e., girl on a quest to find a family member in a mystical world), I recommend El Laberinto del Fauno (Pan's Labyrinth).
As for me, I'm going to go have some nightmares about muppets.