It's more like Nightmare Fuel, but the Queen's transformation is, for some fans, considered to be a fine piece of work, probably because of the effects that the animation creates.
When the Queen transforms herself into the hideous peddler. It was a huge challenge for the animators to not only depict her changing, but to show how she felt as she did. The result has served as pure terror for generations of kids, but it's also a truly awesome One-Winged Angel moment, and it shows just how evil she is - as suggested by Hans Conreid's Magic Mirror in the Disneyland TV show's "Our Unsung Villains" episode, she may be a Vain Sorceress, but her hatred for Snow is enough to trump even her vanity for a time ("just so you wouldn't get bored with this story"; the theme of the special was how villains are underappreciated for the conflict they provide that makes good drama). (Runner-up: her gleefully watching Snow succumb to the poisoned apple.)
The whole movie qualifies. At the time it was made a feature-length animated film was nothing short of miraculous. The fact that Walt and Co. made such a stunning and enjoyable one was an outcome no one planned on. "Disney's Folly" indeed!
Expanding upon this; yes, Disney had Mickey and various other successes prior of course but this was the film that paved the foundations for what we know now as Disney the film studio. Heck, it borders on being that literally as the profits from this film are what built the very studio in Burbank that's still its headquarters today.
Attending the film's historic premiere: Charlie Chaplin, Marlene Dietrich, Shirley Temple, Douglas Fairbanks, Milton Berle, Jack Benny, Roy Rogers, Mary Pickford, Cary Grant, George Burns, among others. All of these Hollywood superstars applauding uproariously for this animated feature. They even applauded the static backgrounds because of the care and craft behind them. Master thespian John Barrymore was spotted bouncing in his seat like an excited child.
Snow White and the animals cleaning the Dwarfs' filthy house.
An unsung lesson the film teaches is tolerance. The movie was made in the 1930s and set even earlier, but not once is Snow White prejudiced or frightened of the Dwarfs. She treats them as men and equals, and asks that they be blessed for being kind to her in return.
The dwarfs chasing the witch through the forest and up the mountain. And Grumpy's the one leading the charge!
The witch's response? Push a giant boulder down onto them. She would have succeeding in killing Snow White and the dwarfs if not for a random bolt of lightning.
The Prince's kiss awakening Snow White.
The ultimate Offscreen Moment of Awesome. When Walt Disney had set his mind to the idea of doing a full-length animated feature based on a popular fairy story, he called in all of his senior staff for a late-night meeting. Essentially, he explained that the feature length would allow them to do the story justice in ways that a short never could. He then proceeded to act out, all by himself, the story of Snow White as he wanted to see it on film. The performance was so electrifying that before he was finished, all of the skeptical animators and storymen were on board, wanting to make this movie a reality. If you were to ever ask any of the old Disney staff about it, they'd tell you that while the movie was magnificent, well, you should have seen it the way Walt did it.