The status screen is one of the best I have ever seen: it combines health, sanity, inventory, how much oil you have left, and a link to the notes page that has all the documents, mementos, and other important word-filled things. Luckily, you have tinderboxes and your oil lamp to light the way, although oil and tinderboxes are both in limited supply. Conversely, monsters can see you easily in the light, which forces you to press on and resist the urge to cower in a corner.
You can regain your sanity by completing objectives or staying in the light. As your sanity gets lower, the screen blurs and contorts, which immobilizes you and makes you more visible to monsters. This is also integrated into gameplay in the form of your sanity meter, which slowly degrades while in the dark and when witnessing horrific events.
Like anything with elements of Lovecraftian Horror, Amnesia has a way of messing with your head. At one point I was being chased by invisible monsters in a flooded cellar - I leaned back in my chair just enough to brush against the armrest, resulting in my jumping five feet in the air.
