Of three films under this name, probably the most awesome scene is the one where they fight a giant evil Buddha (actually a demon impersonating him) that transforms into a gargantuan caterpillar. It then eats two of them, who have to disembody themselves and kill the caterpillar from within with hail of self-propelled swords.
A heavily armed warlord gets in a fight with a bunch of invisible demons. After they cut off his arm, he fights them with three swords at once — one in his remaining hand, one strapped to his back, and one held in his teeth. Then, to compensate for their invisibility, he drips blood from his bleeding hand into a handy hollow and then splashes the blood onto the demons.
The Taoist wizard-monk is pretty awesome whenever he gets into combat. Of particular note: when he shoots fireballs from his hands, like a machine gun, while flying.