The phenomenon can be explained by the notion that, if an entity is sufficiently non-human, then the humanlike characteristics tend to stand out, generating empathy. But if the entity is "almost human", then the non-human characteristics will be the ones that stand out, leading to a feeling of "strangeness" in the human viewer.
Check out the wikipedia entry here.
The uncanny valley is one of my favorite theories. And this blog is about my own uncanny valley: that place between the common and uncommon, where things strike me as both interesting as strange.