I've seen Pan's Labyrinth, too, Melissa - I just replied to your post about it over at the Resurrecting the Movies thread. As I said there, (and I hope this doesn't sound too trite) I thought it was magical.
For some reason, the violence didn't put me off of it like excess violence does in a lot of movies. For example, I cannot stomach Tarantino/Rodriguez movies. You couldn't pay me to watch Grindhouse, as good in a stylistic way as many critics say it is. Or Saw. Or Hostel. I just can't stand gratuitous violence. And yet like I say, for some reason the violence in Pan's didn't bother me all that much. I think I was just so captivated by the world the little girl created - too busy being overwhelmed by it to be fazed by much else.
I do deeply respect directors who use restraint in such things. There is a horrific scene in the beginning of "Disturbia" that could have been played to the hilt of goriness. But the director chose to show one character reacting to what he saw only, and to not show what he saw. It was so much more powerful that way. And again, I respected that he didn't stoop to that level and show it. Same goes for "The Lookout" that I saw a few weeks ago. A story about some very violent people, and a very violent car crash to boot, but again the director left most if not all of the gore to our imaginations. And the car crash scene in the latter one and the first scene in the former have stayed with me like they have because of that restraint - because our imaginations are so much more powerful than any special blood-like effects some FX artist can show us.