Reading the other reviews, I see that homophobes have been duly warned about this movie, so I won't say anything about the relationship between the two men beyond that it is complex and beautiful.
What interests me more for the purposes of this little blurb is that no one has commented on how the "film within a film" (much like the "play within a play" in Hamlet) reflects the actual events unfolding in the prison cell. Molina (William Hurt) is ostensibly retelling his favorite film to entertain Valentin (Raul Julia) and make the time pass more quickly, but he himself admits that he "embroiders" the story to make it more real. So who is to say if this film exists except in Molina's mind, and if it does, what really transpired in the film? The story about the French woman who is in love with a German officer during World War II, and must decide whether or not to betray him, is an obvious parallel to Molina's decision to betray Valentin or not. Even Molina says that he most identifies with Leni La Maison (Sonia Braga) in this film of his, and it's not just because he is a drag queen. It's because he has to choose between the man he loves and "patriotism" (in his case, represented by the police/government as well as his ailing mother).
This storytelling tactic works brilliantly, in my opinion. Kiss of the Spider Woman is indeed original, quirky, and a must-see.