I never played Thief, so I can't compare two. I was really impressed w/ System Shock 2.

re: the graphics - I don't remember being particularly underwhelmed by the graphics, but I didn't play many contemporary titles to compare it to. I was drawn-in by the System Shock franchise, but otherwise didn't really game.

For me the horror element came from the voice acting on the audio journals, the voices of "the many", and those goddamned cyborg assassins.