When they are in the Shell City, smoke from the outlet causes the water sprinklers to spray the store. In real life the water sprinklers in the ceiling detect heat, not smoke. Furthermore, only the sprinklers that got hot enough to fuse their elements will permit water flow, not the entire sprinkler system.
Spongebob points out that he has been awarded Employee of the Month award 374 times in a row. That would mean that he would have worked at the Krusty Krab for 31 years. This could not happen - according to Stephen Hillenburg, Spongebob was born in 1984, which would mean that, as of 2004, he would only be 20.
In the opening sequence, Mr. Krabs says to Spongebob that the customer "took a bite of the burger, and... No cheese!", but when Spongebob goes in to help the customer, there isn't a bite taken from the burger.
When Goofy Goober is singing the theme song, he starts the song with his lollipop in his hand, but when the finger pointing to the kids pops out of his chest, the lollipop disappears and in the next scene the lollipop is in his hands again as he sweeps it around.
When Mr. Krabs and King Neptune hear Plankton's fake message, at the end we hear the click of the phone hanging up; yet when King Neptune bellows with rage a few minutes later Plankton is still on the phone as he is able to hear it.
The length of Spongebob and Patrick's "Facial Hair" changes frequently. You can clearly see during the "Now that we're men" scene that the "Facial Hair" is so long that it stretches off of there mouths but when you see their backs when they are jumping rocks you cant see the "Facial Hair" you can also see it during other shots.
In the beginning, when Spongebob walks out of the wall of foam after he cleans himself, he is wearing underwear. Yet when he puts on his pants and looks in the mirror, and the back part of the pants fall down, we see he isn't wearing any.
The goof item below may give away important plot points.
At the end when Plankton says, "No, because I'm an evil genius, and you're just a kid, a stupid kid." In the Krusty Krab, during the close-up shots of Plankton you can see there is only 1 nail attached to the floor next to the Register, but when Plankton walks next to Karen and Neptune and you see Spongebob do his speech you can clearly see that there are now 3 nails attached to the floor.