If you want German set the 'Audio' option
My copy from Wal-Mart defaulted to German so I set it to English. After reading the other posts I turned it back to German. Much better!
Edit: I used my TV's closed captioning for sub-titles.
Edit 2012: Some of the posts here are really mean-natured, so I'm adding this to my original post of 7 years ago.
Over the years I've become quite adept at, and a fan of, using subtitles, especially when volume control is an issue. I love this movie regardless of language, and I sometimes change the options to hear in English and read the German. I think method of enjoyment is a matter of choice (subjective), and criticism from others is just plain weird. I also think people sometimes forget that horror has fans of many ages and hearing ranges. (End Edit 2012)
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Sometimes the underground economy serves to balance the scales.