Continuity mistake: When Kronk is disposing of the llama body, he runs down a very tall staircase. At the bottom, he runs into two peasants and leans up against the wall. The peasants pass him, walking toward the left side of the screen. Immediately after they disappear from the screen, the "camera" zooms out so you can see the entire palace. Now, the only place the peasants could have gone was up the staircase Kronk had just come down from, unless they wanted to fall off a cliff. If you look on the stairs, though, no one is there. The peasants couldn't have made it all the way up the extremely tall and steep staircase within seconds, so they just mysteriously disappeared.
Continuity mistake: In the scene where Pacha and Kuzco are drying off after they fall over the waterfall, the slot for the wearer's head in the center of Pacha's poncho is clearly visible when Kuzco takes it and uses it to dry himself off. Following the shot change between when Kuzco throws it and when it lands on the fire Pacha is trying to light, the poncho becomes just a solid green square towel with no hole for the wearer to put his head through, which is easy to see when Pacha hangs it backup on another tree.
Continuity mistake: When Kuzco and Yzma make a dive for the potion bottle, Yzma is turned into a cat simply by landing on the potion bottle. This suggests that a person only needs to touch the potion in order to be affected. However, when Kronk and Yzma are serving Kuzco dinner and are trying to avoid poisoning themselves, Kronk pours his potion drink on himself and is not affected.
Factual error: Carts with wheels were not used in the Incan empire. Not only would they not work with all the steps carved into the mountainsides, llamas refuse to pull things behind them. They were used as pack animals.
Continuity mistake: When Pacha and Kuzco fall down the canyon wall only to get stuck in the narrow gap they have to work their way back up to the rope, but when Pacha fell through the bridge just seconds before he had a clear view of the river below. There was no narrow canyon blocking the way.