Last one for 2012! (A quick one sneaking in under the radar... much like Count Olaf keeps sneaking after the Baudelaire children).
This one sees the children forced to work in an absurdly horrific sawmill. Their new guardian is the cruel and mysterious owner of the mill; his partner is almost kindly, but utterly ineffectual.
When the evil count Olaf (in disguise, yet again) teams up with a hypnotist/optometrist, and giant saws are in evidence - well, things are bound to get messy.