This is one of the few Silent Hill games to not include a UFO ending. A Channeling Stone can be found in the game's data, suggesting that a UFO ending was planned but was later dropped.
The game started out as a diffrent game called "Room 302." It is unknown what was changed and when the change was made, but it is believed that the Silent Hill name was added to make sure it would sell.
Walter Sullivan, the game's antagonist, was actually foreshadowed in Silent Hill 2. Walter is first mentioned in a newspaper scrap citing how he killed twins Billy and Miriam Locane, and then killing himself promptly after. This is referenced heavily in the plot of Silent Hill 4, not to mention that the enemy "Twin Victims" are personifications of the twins.