Big Lipped Alligator Moment: David's son playing with the monkey, wearing googly eye glasses and singing "Rock and Roll Martian" over and over. As noted in the Mystery Science Theater 3000 episode guide, all the writers were just fascinated by this scene: "It seems like such a pure 'kid' moment; how did they ever get it on film?"
Designated Hero: Merlin is portrayed as the good guy, even though he tricks a man into summoning a demon and burning down his house.
Mike: Clearly Merlin has brought good into the world!
Oh, it's even worse when you think about it. Merlin wants to bring magic back into the world - so everyone can do things like summon demons and wreak havoc, or at the very least age horribly quickly from using it.
Well, that guy WAS a jerk and not smart enough to control the magic, which is why it went horribly wrong. Merlin might have intended to bring good magic to children and basically good people.
Funny Moments: This exchange between Grandpa Borgnine and his grandson:
Child: The monkey killed the dog? Borgnine: I told you, it's a bad toy. Child: What happens next? Does it kill Michael? Borgnine: Well, now you're getting ahead of me.
Glurge: So, you have Ernest Borgnine telling stories to his adorable grandson about funny old Merlin just wants to bring magic back to the world, as he tells the wide-eyed kid watching the puppets. Then the lady who can't have kids comes in and gets all teary-eyed as she tells random strangers about her husband's infertility issues. THEN Merlin loans his book to the mean old husband, to teach him a lesson about believing in magic. Said husband then burns a cat to death with his fire breath. Hooray!
Hilarious in Hindsight: The rise of sites like Yelp has made giving a store a bad review a pretty effective threat.
Hmmm, a bunch of mysterious deaths that look like accidents but in fact were set up by a malevolent force. Are we talking The Devil's Gift or Final Destination?
Crow: Remember to believe in magic...or I'll kill you.
The newspaper critic's slow dip into insanity as he gets older and older via abusing his magic in the first part, complete with a Slasher Smile to rival The Joker in horror, several of which are directed at the camera.
The disturbing way he reacts to finding a cure for his rapid aging needs human blood:
Recycled Script: Most of the second half was taken from the earlier film The Devil's Gift, complete with the same footage and a few inconsequential scenes of Merlin edited in.
In-story the whole framing device is that this is a script the grandfather wrote and couldn't sell.
Special Effect Failure: The first half of the film has horrible special effects. In particular, when Johnathan starts breathing fire, the source of the flames is clearly several inches away from his face. Johnathan's aging makeup is laughably bad as well (he has an open collar and they forgot to apply makeup below his neckline!).
Mike Nelson: You know, Satan could have at least blended the edges of his bald wig a little better...
What Do You Mean, It's for Kids?: Merlin makes the exact same mistake that Pod People did: shoehorning a crappy horror movie into the package of a crappy kid's fantasy movie and then forgetting to take out the "horror" part.
The Woobie: Michael. He doesn't have a mother, his birthday gift turns out to be an evil demonic toy that wants to kill him For the Evulz and kills his dog in a gruesome manner, he's nearly drowned by his dad's girlfriend in the uncut version of the film, almost gets run over by a car, and dies in the uncut version of the film. Considering all of this, it's probably a good thing the original ending was changed to let him and his dad live.