This is a very cool and weird movie. Everybody has already written what this movie is about so I wont explain its plot. Instead, im going to contribute my interpretation of it.
SPOILER ALERT!!!!!!!! READ THIS ONLY WHEN YOU FINISHED WATCHING THIS MOVIE. Im going to explain this in parts, so read along......
Ok, this cameraman is a lonely individual that wants to experience fear, absolute terror, but cant do it by the "normal means", so he seeks terror in uncommon places, like suicide attempts and filming people. He uses Prozac to help his medical condition, and when he throws it in the garbage at the beginning of the movie, he starts seeing and hearing things that are not there, like the conversation in the underground with the suicidal man ghost, or the Deros. Also, this is why he doesn't remember his ex wife.
Everything the camera films is real, because film cant lie, so I assume that the underground is real, as we can see this underground filmed. Also, the vampire girl is real, because she is filmed also, fangs an all. At the end of the movie, you can see that the cameras are still filming his descent into the underground, so this weird world of downstairs is real also. The ghosts or the Deros are not filmed, so they are only in the insane mind of the protagonist. There's a line in the movie where he says that everything is more real when he films it, and also we only see the faces of other people he is looking at correctly through his camera lenses, because they are real to him only through the camera lenses. All this supports this theory too. He even says when he sees this weird snuff film at the beginning of the film, that he will become a psychopath to really experience terror. This explains his later killings.
This person and his ex wife had a children, information that is not in the movie, and this child maybe was killed or got lost, and this led this couple to their respective insanities and separation. This is not explained at all, but it helps understand the plot, so play along. The cameraman doesn't recognize his ex wife until he already killed her, and in his little moments of lucidity we see that he understands the situation that he is in, and that he is becoming a bad person everyday, but stills doesn't experience absolute terror. Also, we see that he is not satisfied with the terror showing on the face of his victims when he kills them, so he thinks that what he needs is something else to really get where he wants.
At the same time, he meets this "Vampire Girl", who is very real, and he mistakes her for his lost daughter. That's why he gets her things, food and takes care of her. He sees her as a redemption option, but the kid is out of this world, and will only lead him to his death. He even gets her animal and human blood to drink, ignoring the weirdness of this situation, thinking that is normal. The kid even got lost, when the lunatic mother, his ex wife, enters his apartment and makes a mess looking for her missing daughter. That's why everything is messy and that's why she knows that he has somebody living in his apartment. But she returns, to still live with his protector.
At the end of the movie, we see in him another moment of lucidity, where the cameraman says that he has tried everything to get terrified, killings and all, but nothing helped him, so he will reorganize his life, and forgets about the creature. But his insane mind is still at work, and he starts hallucinating again, seeing Deros in the city urging him to return to his apartment. So, he returns to his vampire child, who is dying of starvation. In this crucial moment, he rips open his tongue, therefore condemning himself to death by heart failure due to blood loss, to give her life, the life that he doesn't want anymore because he doesn't have anything to live for, and takes the creature back to where he found it so it can live underground.
And that's when it hits him right in the face, the terror he seeked desperately all along is there at last, because at this very moment he sees that this creature is otherworldly and is not his missing child but a demon monster, and so he now realizes that everything that he did was to feed a demon child, and the mere presence of being looking at this demon, who is not his little kid anymore but a monster, scares him to death, a death that also is real because he is now at the other side of the camera, and this made it more real than ever.
Who was this kid??? Well, there's a theory in the asian mythology that there are deities called Marebitos, that come to our world every now and then to heal things, so maybe this kid came to Masuokas life to heal his longing for his child, and ended being the terror he seeked during the movie.
Hope this helps you.........