The arch-enemy is a strong fiction trope, and can be utilised to great advantage in a game. The thing is, to establish an arch-enemy, you need an enemy that the PC cannot defeat. At least not for a long time. The arch-enemy, after all, has to recur several times in order to gain that exalted status.

To make the enemy even more intimidating and epic, have them seemingly die at the hand of the hero. But be careful to make it some sort of No One Could Survive That scene, in which the body cannot be found. Make it convincing, so that the PCs really do think that's the end of the villain. Don't bring the enemy back too quickly. Go three or four entire adventures without them. Let the PCs get complacent.

Then bring the enemy back, in an even bigger and more devastating plot. Don't reveal who's behind it all at once. Rather, drop subtle hints that look like the (figurative) fingerprints of the old enemy. Get the PCs speculating and guessing and going, "No, it can't be..." Then you can reveal that their arch-enemy survived somehow. The confrontation when they finally meet again should be suitably epic - it pretty much cannot not be by this stage.

And the really cool thing? You don't even have to explain how the arch-enemy survived the seemingly impossible-to-survive death scenario. Leaving it completely unexplained just heightens the mystique and aura surrounding them.

Transcript

Darth Vader: I've been waiting for you, Obi-Wan. We meet again, at last. The circle is now complete.
Obi-Wan: Anakin—
Darth Vader: You killed Anakin. My name is Darth Vader.
Darth Vader: You consider yourself a paragon of radiance.
Darth Vader: But when I emerged from your shadow I saw the damage you had wrought.
[SFX]: whooom
Darth Vader: Look, Obi-Wan. Everything your light touches is corrupted forever.
[SFX]: whooom
Darth Vader: But I have a different light for you now.
Darth Vader: When you left me, I was the lowest of the low. Now I am the master.
Obi-Wan: Only a master... of evil.
Obi-Wan: Darth.
Obi-Wan: Sorry, that sounded better in my head.