Already mentioned by others:
1. Mouse must be held down for mouse look.
2. No network support
3. Requires Flash Player 10.
My observations:
0. File is standalone. Save the quake.swf to your harddrive and disable the network and drag to your browser and it works fine so is entirely standalone.
1. Sound volume changing does nothing.
2. Can't save games obviously. Wonder if can load if in a pak file? [it appears to support loading]
3. Can't take screenshots obviously.
4. Can't directly bind mouse from menu. Like can't bind mouse 1.
5. Sound rate is 44100 (a little "crisp" compared to WinQuake)
6. Despite no network, maxplayers works! Would Frikbots work?
7. Loads like lightning when stored locally.
8. Uses about 50% of my cpu when idle in the console!
9. Continues to run even if isn't active.
10. Obviously can't save config.cfg or your keyboard setup.
11. 640 x 480 is the ideal resolution. A web page should embed it as so with a width and height.
12. Doesn't support command line parameters obviously.
Results of above:
Features I would probably add ASAP:
1. FitzQuakey style cmdlist and cvarlist and operator callback. I want to know what cvars exist without using http://quakewiki.net/archives/console/
2. Since view area dynamically resizes, sometimes the text looks "scrunched". And I don't see a way to "get" the current resolution (I bet it exists). The "video modes" menu is gone, which could be used to display information.
3. Would be cool to compile and be able to have a utility replace the pak0.pak or whatever is embedded with a different pak0.pak.
Then you could mod it without recompiling or any weirdness, not that it would take that long after getting setup anyway. But that puts the onus on someone to do the long setup process for Alchemy and mess around with the source EVEN IF they just want to try modding it (i.e. replace progs.dat for Frikbots, swap out models, replace maps or whatever) and have no desire to do any "engine" modification.
4. sv_progs modification (ability to specify progs.dat)
viewtopic.php?t=1263
This would allow someone to put 2 or 3 progs.dat like ctf.dat or frikbot.dat into the pak file and not have to implement likely impossible gamedir switching. Obviously clearly illegal with Quake shareware, but not for personal testing or with OpenQuartz or another total conversion.
5. sv_sleep 1 modification from aguirReQuake (DarkPlaces does this by default)
Reduce cpu usage. Amount unknown. Would be interesting to see.
Strike that: I get 24 fps in a timedemo. Still maybe when the console is down.
Flash features it lacks sometimes seen in other flash applications:
1. Can't switch to fullscreen mode
2. Possibly ... isn't aware when it doesn't have the "focus". (Not sure if this is a "flash feature" but it could be used to minimize the CPU usage).
3. Could it use "Flash cookies" to save your config.cfg? Hmmm.