Nice, but..
Actually I liked this game, even though it obviously wasn't programmed very good.
The main problem is the laggs and they are simply terrible. You can't blame Flash Mx 2002 for it. It's just because you didn't optimize your code very good. You also can't say "Since this game has so much in it, it tends to lag on bad qualities". The amout of content doesn't cause the framerate drops, you should know that. I suspect that you've used too much onEnterFrames, and that your scrolling code could be optimized too. I also didn't like the fonts you used in the game, they really don't fit to the style. Overall this game isn't bad, but its really too glitchy and needs some optimization. I hope you continue working on it, because i love mario flash games :) Btw, i've done one too. You can look at it if you want, but it's not very good :/
I'm currently working on a sequel, if your interested:
h*tp://monolith.lol.dk/marioworld/
or
h*tp://monolith.lol.dk/marioworld/mario2.swf
[I hope you're not offened by this review, I just don't like if everyone's saying "OMGG!!11 THIS IS SOOO AWWESSOM". This doesn't help you to improve. So, don't be pissed of :) ]