The movies premise is a troll named Trantor who steals the souls of children, turning them into wooden dolls to bring back his army of trolls. Its scarier than it sounds, its very cheesy and the parts that are meant to be scary are actually funny. Kids can handle it.
Audiences expecting a purely silly Ernest outing may be surprised by the film's scarier moments, where the evil troll stalks and attacks children. Eerie atmosphere, sound design, misdirection, and slimy monster effects are all employed to create a considerable level of fear during these scenes, which are played straight in contrast to the rest of the film's comedic tone.
The design of Trantor and the other trolls were created by noted effects artists, the Chiodo Bros (Killer Klowns from Outer Space). They are gross, ugly and rather surreal looking, with lots of slime and exaggerated features (bulbous noses, big ears, gnarled teeth, etc). May be frightening for some children.