Maybe someone's already said this, but who the fuck cares about del Toro? Whether or not a movie he's involved in is good is a crap shoot. Pan's Labyrinth? Great. Orphanage? Kinda shit. Hellboy? OK. Mama? Pretty garbage. Don't be Afraid of the Dark?!?!? It's not like the guy *can't* make a good film, he clearly has the chops, but he's often involved in pretty lacklustre affairs. And, honestly, video games are just a completely different medium.
And let's not forget that people have kind of stopped giving a shit about Silent Hill. Shattered Memories was a legitimately great game, and it sold less than half a million copies (and only broke even because of the PS2 port), on a system, the Wii, that had a *huge* install base. Given that, what's the market these days for a great Silent Hill game?
Del Toro might not always produce greatness, but he sure as hell is at the top of his game whenever creature design is concerned. THAT's where I hope his expertise will come to fruition on this the most.
And about the series in particular: Yes, you are spot on about it having drifted kind of into obscurity since it's glory days. But that's precisely why it is such a good thing that big names like Kojima, Del Toro and even Reedus are now involved with its "reboot" or whatever this will end up being. A huge chance for the franchise to be revitalized.