The pilgrims find an invisible barrier blocking their path, which Monkey breaks through using his Magic Wishing Staff to reveal that, while it is daytime on their side of the barrier, it is night on the far side. The effects to show this are quite well done, and certainly get the scenario across.
It turns out that the Queen of Night has separated from the King of Day, and so now instead of endlessly cycling between the two, she rules a domain of endless night while he rules a kingdom of perpetual day. And the magic barrier between them ensures that never the twain shall meet.
On top of that we see that she is a vampire while he is a vulture spirit. The queen spends the neverending night-time sucking the blood of her subjects without having to fear the dawn, while the king works his subjects to death as there is no dusk to bring an end to the working day.
This sounds like a problem that Monkey could easily solve. But unfortunately he meets a girl in the land of night and, for reasons that aren't entirely clear but seem to be because she looks a bit like Tripitaka (I shall refrain from commenting on the psychological significance of this since it's obviously played for laughs), he falls in love with her and this infatuation causes him to lose all his magic powers.
Pigsy, meanwhile, falls in with the Queen of Night and looks to become her new consort. He's not at all put off by the fact that she's a bloodsucking vampire - in fact, when she bites his neck he says "You're a vampire? How do you do? That's just incredibly sexy."
It is actually her that is put off by him, and she only allows him to stay with her when he promises to fight Monkey for her. Pigsy doesn't look forward to this at all, until he finds out from Sandy that Monkey has lost his magic, after which he takes some joy in beating up the helpless ape.
With Tripitaka's help, a pair of star-crossed lovers defy the ban on men and women crossing between the two kingdoms, and this drives events toward the climax of the episode at the King of Day's palace.
Tripitaka uses the headache sutra on Monkey until he regains his powers, and he battles the Queen of Night, defeats her, and then, before Monkey can kill her, the king offers to die in her place and so the two are reconciled and everything ends well.
This is a well-plotted story which balances silly moments with a serious - and, at the end, rather heavy-handed - message about relationships. On the silly side, of particular note is Monkey losing his powers and causing dozens of pictures of the girl to be materialised whenever he tries to do his magic tricks, much to his embarrassment.