It has EXCELLENT potential
A few suggestions/ideas/comments:
1 .) I liked the music
2.) The bullets kind of came out not where you'd expect them to (id est, out of the barrel)
3.) The bullets maybe should make a noise when they're fired
4.) The bullets could be more evenly distributed
5.) If you're up to the actionscript, you could make layers (up/down to move back and forth, like the old-school fighting games)
6.) Variety of badguys
7.) Variety of weapons
8.) Limited ammo (and thus the necessity to pick up more)
having said all that I'd like to say that this was cool. The main character grapics were excellent (w/ exception to the bullets), and so really the game already has an excellent foundation but you should just build on it, maybe by looking at some of my suggestions. Either way, I look forward to any future submissions by yourself or a modified version of this game!