I love samurai/kung-fu movies and this one is definitely one of my all-time favourites!
I am NOT a fan of Norris or Segal or other one-dimensional Hollywood knock-offs that lack the exotic charm, otherworldliness, and richness of films made in Japan/Hong-Kong. You should also see Kung-Fu Hustle (which is stinkin' funny), the Five Deadly Venoms (great classic Kung-fu movie), Seven Samurai and Yojimbo (and other classic Akira Kurosawa films).
The humour is so smart and hilarious that it had me on my knees hitting the floor with my hands laughing my head off. The director does a magnificent job juxtaposing and playing straight completely absurd elements. Kind of reminds you of the dry absurd humour in the Royal Tannenbaums.
The fighting scenes are lightning fast and exciting. If you are looking for extended fighting sequences then this is not the movie for you. Unlike the standard revenge plot line of 1970s disco-era Kung-fu movies (i.e. "You killed teacher!" or its variants "You killed master/my brother/my father - now I must practice") this one has a lot of interesting and surprising twists and turns that keep you engaged in the story, and caring about the quirky characters.
The dance sequence at the end was just a tour de force capping off this smart and well-paced movie that plays like a wonderful dream from which you don't want to wake up.