Factual error: The design of the dirigible is rubbish. The gas bag would need to be about twenty times that size to lift the boat-shaped caboose and its passengers, their weapons, equipment and luggage.
Revealing mistake: When Ardeth Bay is waiting for the warriors of Anubis to attack, his close up shows that he is sweating off his forehead tattoos.
Continuity mistake: When Evie and Rick are fighting the bad guys in their home in England, Evie does a cartwheel. Her skirt rides up, and she is wearing stockings. A few seconds later, they all rush outside and Evies skirt rides up again and she is now wearing tights.
Factual error: When Rick and Jonathan (in his mysteriously foam free tux, as noted elsewhere) vault over the fence outside Rick's house, a thug is firing at them with a machine gun from an upstairs window. Look at the bullet impacts on the top of the fence - some of them could only happen where they do if the bullets had passed straight through Jonathan's body.
Factual error: When Rick and Evy find the first sand castle Alex left, there is one point where Evy lightly brushes some sand off of the top. If the sand had fully dried, the castle would have crumbled. (Confirmed in DVD commentary).
Revealing mistake: The Anubis Warriors do not leave footsteps in the sand, but they do kick it up when they run. This is especially obvious when the army turns to dust at the end of the movie, leaving a pristine, footprintless desert. One could argue that the dust from the disintegrating Warriors covers the footsteps, but the dust also engulfs the Medjai, whose footsteps are still visible when they cheer.
Factual error: Rick and his kid run to the pyramid, desperate to reach it before it is illuminated by the sun. This means that they will have to outrun the terminator line, the distinct line between night and day created by the rotation of the earth. They are in central Egypt, and at that latitude the terminator line moves at about 1300 kmh.
Revealing mistake: At the beginning of the movie we see Rick and Evy almost drowning in crystal clear water. Had that water really been from the Nile, it would have been muddier.
Revealing mistake: During the final battle, when the burning oil-pots are being knocked over, you can see the weapons on the sides are rubber from the way they bend and wobble.
Revealing mistake: In the opening battle, when the armies organize before charging, you can see some men walking right through each other, where digital doubles have been added into the scenes. Hard to catch, but it happens at least once or twice.
Continuity mistake: When the family is on top of the pyramid, in one shot Brendan Fraser has stubble, then in the next shot he is completely clean shaven.
Revealing mistake: In the battle against the Anubis Warriors, you can see the CGI sand explodes "wrong" sometimes. In other words, the sand sometimes overlaps the wrong areas, such as people that are in front of it.
Revealing mistake: During the fight against the Anubis warriors, in one shot you can see two men stab one of them in the chest. The warrior explodes and when the sand clears only one man remains. This is because all of the men were photographed separately and digitally composited together, so one of the computer artists made a mistake and accidentally cut out a character half-way through the shot.
Revealing mistake: When the Nile explodes through the corridor in the beginning, as the villain's goon is running by, you can see the wall suddenly get a little bit lighter in a circular fade pattern. This reveals that two separate images were used, and they were composited together. One day the goon was filmed, then another, the water bursting through was filmed, and the lighting was slightly off.
Continuity mistake: As Imhotep hangs from the ledge his arms change position several times.
Deliberate mistake: When Rick and Imhotep battle man-to-man at the end, in one shot above them you see steam blasting from the side of the screen. Problem is that when the angle changes, it's clear that area is just empty space, so the steam came from nowhere. (The DVD commentary mentions that they always had people with flame-throwers and steam-machines right off-screen to blast fire and smoke to make certain scenes more dramatic).
Factual error: When the dirigible is passing Abu Simbel (where the four sitting statues are), the second one from the left is broken, which is accurate. However, in reality, the rubble is sitting at the foot of that statue, not a considerable distance in front of it like it was as they passed.
Audio problem: When the first fight happens at the house, we hear Alex tell his mom to look out, but he's actually not saying anything, he's just standing there quiet.
Revealing mistake: During the very first shot of the scene where the heroes arrive in the canyon (during the "Wall of Water" scene), pay attention to the shot carefully as the camera tilts down, as several elements seem out-of-place. When Imhotep steps into frame, the lighting on him doesn't quite match the scenery around him (indicating he was shot against a blue or green screen and added into the shot), and the waterfall in the background moves somewhat unnaturally (slightly jittery if you look closely) towards the end of the shot.
Revealing mistake: I can go with Alex making sandcastles to let his parents know where to go, but if you pay attention, the scale in each castle is perfect in every detail, and there are portions which would just be too hard to make by hand.
Chosen answer: He says, "this just might work" meaning he and Alex trying to bring Evie back using the book of the dead.