I just finished watching it last night. Sorry if this gets a little long. I'll try to not post any spoilers.
I haven't seen any of the previous Chinese Ghost Story movies so I can't compare the two. Having only read a brief synopsis of this movie, I had no idea what to expect. It looked like a fantasy, a romance, horror, and maybe a bit of action. I can say that after watching this, it is a blend of fantasy, romance, and action. LOTS of action.
One thing I have to praise off the bat is the colors of the background. I'm a sucker for bright colors and there are plenty of them. It helps that the actors wear costumes that are very mute which makes the backgrounds pop out. It adds a level of mysticism to the movie since you would never see these kinds of trees anywhere in real life.
Now, to the movie. A government official named Ning Caichen arrives at the Black Mountain Village during an intense drought period. He decides to head up the mountain to find a water source. He goes with a couple of other people and eventually finds water. However, the majority of his group is taken and killed by the demons (spirits/ghosts/demons. I don't really know what they are, but the subtitles said 'demon' so I'll call them demons) by having their life force sucked away. Caichen is approached by Nie Xiaoqian (Liu Yifei) and is about to get his energy taken, but he rejects her advances and eventually befriends her.
Meanwhile, a group of 'Spirit Masters' are hunting down demons and eventually seal away the Tree Demon, the demons' leader. Yan Chixia (Louis Koo), one of the top Spirit Masters, also had a relationship with Xiaoqian. The movie then deals upon the growing relationship between Xiaoqian and Caichen, Chixia's hunt of the demons, and the Tree Demon's return.
Acting, I'll only talk about Liu Yifei's at the moment. I know she's gotten a lot of flak for being wooden, emotionless, and playing the same type of character, but I thought she did ok here. Yes, she does play the same type we've seen before (Lonely girl, meets guy, can't believe guy wants to be with her, big troubles happen with guy) but this is a bit different wherein we actually see the more fun, light-heart moments of their relationship. One moment that sticks out is when she gets, basically an addiction, to sugar candy.
Effects, I was surprised. Just like the scenery, the effects are all kinds of colorful. Whenever a demon gets killed, they explode into an array of colorful dust that reminds me of nebula. Do you find the colors in this picture beautiful?
http://img52.imageshack.us/img52/9238/ruhnp.jpg If so, you're in luck because blends of color like this explode everywhere. All very seamless and it blends very well into the movie.
Action-wise, I was very surprised. I should've known from the director of Ip Man, SPL, and Flash Point that there would've been some action. Most action involves fighting with magic and whatnot, but there are some sequences of hand to hand combat. One in particular that sticks out involves a one-armed swordsman. The action is very typical of Wilson Yip; fast paced, sound effects that sound like two cannons are launched at each other. Just great.
On the negative side, and I can't really fault the movie for this but I was a bit disappointed it wasn't scary. I know that ghost movies don't have to be scary, but that was my first impression. There is a jump scare or two some imagery that, if I actually saw in real life, I would pee my pants, but that's about it.
I wish we could've got to know more about the demons and Spirit Masters. The Spirit Masters' various magic attacks are great to look at and it would've been great to know more about them and how they got those powers. The demons could've just used more time. I would've liked to see more development on the Tree Demon.
And I'm sorry, but that ending just made me go -_-. After all that's happened, you go and do that?! -_-. Just -_-
Overall, its definitely worth a watch. I'd give it a solid 7/10