This movie recently bubbled to the top of my Netflix queue. It gets good reviews at IMDB and Amazon, and you can read them, but I'm here to spoil the plot. ;)
The movie is mostly told through flashbacks, which we revisit to clarify certain events, or see alternate explanations of what happened. Other movies that use this technique are the classic Rashomon and Courage Under Fire. The movie has plenty of gravity defying fight sequences as well, which I really like, even though they sometimes look goofy.
Hero is loosely based on history. It is set when China didn't exist and was instead seven warring regions. The emperor of one region, Qin, survived an assassination attempt and put a bounty out for three assassins: Sky, Broken Sword, and Flying Snow. These assassins are legendary for their skill, and two of them are always together - Broken Sword and Flying Snow (a woman).
Years later, a unknown warrior ("Nameless", since he was orphaned before he was given a name) shows up to collect the reward. He brings the weapons of the defeated assassins and gains entry into the emperor's palace to tell his tale. He explains he just flat out beat Sky one-on-one, and took Sky's weapon to Broken Sword and Flying Snow to prove it. The emporer asks how Nameless defeated the team of Broken Sword and Flying Snow. Nameless replies he turned them against each other by telling them Sky had feelings for Flying Snow, and this lead to a fight where Flying Snow killed Broken Sword. Then, Nameless could defeat Flying Snow by herself.
However, the emporer doesn't quite believe this tale, since he met Broken Sword and Flying Snow, and doesn't believe they would react that way. He accuses Nameless of allying with the assassins in order to get close enough to him for another attempt.
Nameless confesses that is indeed the truth. Nameless is from a rival state and was orphaned by the Qin Emporer's army, and has been plotting for the last decade on how to exact revenge. He explains he met with Sky and enlisted his help - basically to let Nameless win with witnesses, in order to convince Broken Sword and Flying Snow to join in, which would result in the best chance for an assassination. Sky agrees and is killed, and Nameless goes to see Broken Sword and Flying Snow.
He finds they aren't getting along that well, Flying Snow is mad at Broken Sword. It seems that the only reason the Qin Emperor survived the first assassination attempt was because Broken Sword had a change of heart - after they gained entry to the palace and had the emperor at his mercy, Broken Sword let him live. Broken Sword tries to convince Nameless to do the same, give up the assassination attempt. His reasons are essentially: China's greatest chance for peace is to unite under the Qin Emperor. Broken Sword thinks despite being a brutal military dictator out to crush his enemies, the Qin Emperor is basically a good leader and a united China would be prosperous and peaceful.
At the end, Nameless says that is his dilemma. He's close enough to deliver an unavoidable fatal strike, but is having second thoughts. He decides to let the emperor live, and is caught and executed. So much for being a compassionate assassin! The Qin Emperor goes on to unite the country so his sacrifice (and Sky's, and Broken Sword's, and Flying Snow's) is not in vain.