I got more information that I apparently forgot to include earlier. Inutaisho carried 3 swords that you can see in the picture above. Two of them are obviously the Tetsusaiga and the Tenseiga, the swords carried by Inuyasha and Sesshomaru, respectively. The sword in Inutaisho's hand is the horrible hell sword, So'unga.
**Spoiler Warning**
The following are events from Inuyasha Movie 3. When Inutaisho died, his followers, Myoga and Totousai, took posession of the 3 swords for safe keeping. In accordance with Inutaisho's wishes, they delivered the Tenseiga to Sesshomaru. The Tetsusaiga somehow found its way to Inutaisho's grave in the netherworld where Inuyasha later recovered it during the early series. So'unga was sealed away because it was believed no demon was strong enough to wield it (think Tokijin x 3). So'unga remained sealed away for hundreds of years until Kagome's grandfather came into posession of it in the modern era. When Inuyasha came for a visit, the sword sensed his demonic presense and broke free of its seal. If you want to know more, watch the movie.
