I think that is the correct phrase...? Or, in other words, when we read a novel, we have to suspend the fact that we know it is not true. To what extent we do that depends on our attitudes, the author's craft, and probably a bunch of other things.

For example, when I read P&P, I suspend my disbelief into oblivion, so that the world becomes absolutely REAL, and in fact, I have to remind myself with a good pinch on the arm or shake of the senses that it is not real, and I am in fact in the 21st century.

As a reader of CofO, I only suspend my disbelief a little bit, and therefore, am not frightened. There are many reasons for this: I am jaded by contemporary horror films and stories, I am jaded by JA's satirical eye on Gothic, and as a writer, HW is good, but not good enough that I believe his stories implicitly. Someone commented earlier that the story of Manfred's pursuing Isabella was frightenting, and caused that reader to have goosebumps. I agree, and IMO it is because we are still frightened by that type of thing: bad man, possible rapist {can I say that here, if not I am sorry} chasing a young innocent girl. We can suspend our disbelief of the story enough that we are moved by this, and believe it to be actually happeneing. Thus we are scared. But the talking portrait is so far out of range that we do not suspend disbelief, and rather laugh at it.