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.