King Arthur's duel with the Black Knight, which handles the whole swordfight thing somewhat realistically—Arthur employs a blow from the pommel of his sword at one point rather than continuously clashing blades with his foe, dodges rather than parries some of the attacks, and ends up aiming for the Black Knight's arm rather than his sword. Then, of course, the hilarity starts to set in.
Sir Lancelot is awesome by being the only knight (including King Arthur himself) able to get past the guardian of the bridge and crossing it safely, not by outsmarting or tricking the guardian, but simply by answering all of his questions honestly!
The music playing when the wooden boat takes King Arthur and Sir Bedevere to the Castle of Aaaarggh. You feel a sense of satisfaction for them as they've completed their quest. Almost brings a tear into your eyes. At least until the humor sets in.
King Arthur: Our quest is at an end! God be praised! (he and Sir Bedevere bow) Almighty God, we thank Thee that Thou hast vouchsafed to us the most holy- (a sheep is flung at them) JESUS CHRIST!!
Dennis the peasant. An uneducated, shit-covered farmer is able to utterly demolish the legitimacy of Arthur's reign, leaving the king with no choice but to completely ignore him.
Sir Robin, for all his utter cowardice, actually saves the day when he continually and without noticing, uttering the words that weakens The Knights Who Say "Ni!" so the Knights can escape and not put up with their Fetch Quest. That word? "It".