Hey, Ray, I'd just suggest not giving up on HPL until you read "The Colour Out of Space." I also like "The Rats in the Walls" but it's closer to a conventional horror story; TCOoS is closer to s.f. and Lovecraft adopts as close to a reportorial tone as he can. which I think makes the story quite effective.
Really?
I think maybe some impact on horror. I struggle to see much impact on Fantasy. Incalculable seems a bit of hyperbole?
Horror isn't necessarily a genre, and really wasn't until the late 1970s and early 1980s under the influence of Stephen King's enormous commercial success. Horror can cut across genres: Mystery,
The Strange Case of Dr. Jekyll and Mr. Hyde (at least Ellery Queen claimed if for the genre) and
The Hound of the Baskervilles; s.f., "Sandkings," "Who Goes There?" and maybe as much as a quarter of the stories in the S.F. Hall of Fame volumes; fantasy, a good deal of Robert E. Howard and Clark Ashton Smith, as well as works like
Our Lady of Darkness.
HPL wrote a fair portion of Dunsanian fantasy, not least
The Dream-Quest of Unknown Kadath (included in the Ballantine Adult Fantasy Series edited by Lin Carter), and short stories like "The Cats of Ulthar." He also wrote some s.f., notably
At the Mountains of Madness and "The Shadow Out of Time." Most of his work sits in that area of weird fantasy that's pretty much horror, but has features that differentiate it from ghost stories.
As for HPL's influence on fantasy, he championed and/or mentored Robert E. Howard, Clark Ashton Smith, and Fritz Leiber among others. His influence on them branched out through them into S&S (Smith's Zothique stories inspired Jack Vance and Gene Wolfe; Howard inspired Karl Edward Wagner; Leiber has inspired countless other writers in sf, fantasy and horror -- and outside; Michael Chabon has praised him -- and is arguably the only writer Lovecraft dealt with whose work across those genres is on a par with Lovecraft's own).
In spite of being called the World Fantasy Convention and offering the World Fantasy Award, looking down its list of winners since the beginning note some of the names,
Fritz Leiber (lifetime award, also for "Belson Express," a fine late horror story)
Robert Bloch (lifetime award)
Manly Wade Wellman (lifetime award; also for
Worse Things Waiting, a fantasy/horror collection)
Robert Aickman (for a vampire story)
Russell Kirk (for a ghost story)
Hugh B. Cave (lifetime award)
Ramsey Campbell (lifetime award; also for a retrospective collection)
Frank Belknap Long (lifetime award)
Charles Grant (for a horror story and as editor of an anthology of horror)
C. L. Moore (lifetime award)
Roald Dahl (lifetime award)
Karl Edward Wagner (for a vampire story)
Peter Straub (lifetime award)
And just to highlight HPL's influence, this year's winner of novella,
We are All Completely Fine is Lovecraftian fiction.
I think WFC's recognition of fantasy has evened off over the years and broadened (though fans of epic/heroic/high/Tolkeinesque fantasy always feel they get the short end of the stick from WFC, thus the Gemmell), but the award began with the rise of horror as a genre and was inspired by that. HPL made sense at the time.
I don't think you can read HPL's fiction without acknowledging his racism -- I've heard his letters are worse and some of the quotes, like those Theresa gave, are painful reading. And I'm not sure we can brush it off as him being a man of his time. But if we concentrate on the fiction, he opened subject matter that no one had quite gotten to before him, moving the supernatural away from magic and toward science.
For more, track down Leiber's "A Literary Copernicus."
As for renaming the Howards and offering a new statue, I'm saddened but I agree the WF was in a lose-lose situation, some fans incensed at the change and others incensed if there was no change. But given the expansion of fantasy across media, these kinds of growing pains are inevitable. Things change. Remember, when the Award was cooked up in the 1970s, there were less than a handful of movies based on HPL's fiction, there was no Library of America volume (or Library of America, for that matter), no academic criticism just fan criticism, and Lovecraft's name was only known among a relatively few readers at a time when reading was more prevalent across the population.
Randy M.