I would have prefered keyboard controls.
I loves me a good sh'mup. :) And this game has a lot of the neccessary ingredients to make a great classic shooter. It features great, epic music, sleek CG spaceships, and collectible power-ups. Unfortunately, it makes some compromises between classic shmup gameplay and Flash expectations, and this ends up spoiling the experience.
It starts off very nicely. You choose your ship's weapons loadout from a menu that reminds me of one of my favorite shooters of all time, Axelay. After that, it's a single very classy pane of backstory in the form of a mission briefing, including the most epic description of a black hole I've ever encountered. One click from there, and you're into battle.
And throughout most of the stage, the gameplay stays good. A few sweeping mouse gestures are sufficient to dodge enemy fire, then dart back into position to fire at the enemy drones. Ships come at you in waves and feature various movement patterns. A few enemies fire back (from off-screen, even!) but I'm happy to report that enemy shots travel slower than your ship, and enemy ships travel slower than your shots, so there's no "that's not fair" drama.
In fact, this game smartly avoids most of the mistakes you will often see with sh'mups implemented in Flash. Collision seemed perfect, the first stage was easy but not too easy, and the handfull of overlapping risk/reward schedules (powerups, enemies, and bullets) were intuitive and responsive, with the sheilds giving you *just* enough leeway to make a few mistakes without having to start over. I'm not sure how comfortable I am with the invisible line you can't cross in the middle of the screen, but it wasn't a deal-breaker. (And I know from expeirence that proper collision detection with a full-screen boss is be a non-trivial problem to tackle in Actionscript, so I can see how a half-screen approach like this would be a tempting shortcut.)
Unfortunately, Star Serpent Sigma drops the ball when it comes to the first boss, for a couple of reasons.
First of all, when the boss kills you, all your powerups disappear. So one hit pretty much wipes out your chances. I would have liked to see the powerups scatter from your ship so you can re-collect them, or perhaps a "memory" system that keeps track of your maximum power level accumulated during the stage, and when you take hits, it reduces your weaponry, but when you die, you would respawn with the ship fully powered-up again to the level you were at. This is a matter of taste and varies from shmup to shmup, and it wasn't the main issue here so I won't say much more about it.
Another minor quibble was that the boss's charge-up effect for the beam weapon was very subtle. I didn't notice it until it hit me the first time, and after I did notice it, it was hard to tell just by looking at it how close to full-charged the beam was. Some other games have had very explicit visual cues for this, in the past... but I was able to get the hang of it, after a while.
The most urgent issue I had with the boss was, when dodging the cross-fire from those mini-turrets, I would usually move the mouse off the edge of the flash window and click on the web page. :( I quit playing then, because it kept happening, and I realized the game would probably be full of places where my instinct would be to dodge quickly, and the delayed-reaction mouse interface would cause the same thing to happen again and again.
Ultimately, I think it was a bad idea to use the mouse at all. I realize menus in Flash are much easier to do with a mouse, and that going froma mouse-menu to a WASD game is awkward. However, a more graceful solution would be to make everything, even the menu, keyboard-driven. It's hard to do, but I've done it before in a game, and the cohesion and classic feel to the control was worth it IMHO.
Also, the boss would have been AWESOME, if instead of the invincible arms over the core, it had lots of parts you could break one by one.
It's probably too late to implement all of this NOW, but consider it for future games. :)