Before you watch this movie, you might want to read the book that it's based on: The Shadow Spinner. When I first saw it, I was a little let down on how little it actually follows the story. That really doesn't matter however, as you may see.
As for any sexual content in this movie, well let's just say there's some passionate kissing, and a couple taking a bath in a bathhouse (no nudity). Other than that, it's not terribly inappropriate. A woman is married to a Sultan of Iraq in this movie who has gone mad. As a result, there are some voilent scenes with him slightly abusing her, and in Sharazad's (book name) stories. As for language, you'll find a few odd minor disruptions in there, but nothing too extreme. When it comes to alchohol, there's a man drunk in the story BacBac the Hunchback, but other than that, not too bad. Overall, this is a very long movie, but quite worth it. Although it may look a little cheesy at times, it teaches good morals, and shows how a madman can be turned sane again by a lttle comfort.