Dueling Games: With Electronic Arts' Starflight series. Note that Paul Reiche III is credited in the Special Thanks for Starflight while being one of the co-creators of Star Control, and Starflight's lead designer, Greg Johnson, also took part in the development of Star Control II, so the developers probably don't feel any need for animosity between fans of both games. (For that matter, fans usually like both games.)
Fortunately averted in the case of Star Control II. The executives wanted to release the game in a buggy and highly incomplete state with placeholder dialogue everywhere. The developers spent 6 months of their own time and money to finish the game, rather than have the unfinished version released.
How Star Control 3 to be in the first place. The publisher wanted to get a third game out, but only held the rights to the name, and not the content. The creators who held the rights to everything else finally gave in, reasoning that it was better than having a new game under the same name with nothing carried over from previous titles.
Older than You Think: The manual for SC2 talks about the expedition of scientists to the newly-discovered Precursor base in Vela II. The lead scientist? A man called Professor Farnsworth, described to be brilliant, though flamboyantly egotistical with a rude impatience for his peers note Wernstrom!!, and notoriously impossible to work with. May or may not have been the first.
Throw It In: Paul Reiche III said in an IRC chat that the Orz language evolved from some of Erol Otus' randomly scrawled notes (which included the first appearance of *happy campers* and *Jumping Peppers*).
Vaporware: StarCon, a fully 3D sequel vaguely similar to Colony Wars. The Harika were one of the confirmed races.
Word of Gay: The Androsynth, according to Paul Reiche III. It's subtly indicated even in the original material — look closely at their in-game art, and you'll notice that they have little pink triangles on their uniforms.