One of the better flash clones I've seen.
The game looks and sounds very good. The only problems I can see in it are in the details. The responsiveness of the controls and the way the physics worked in the original games was pretty consistent, and I'll admit that the fact that it's been hard-wired into me caused a few problems where I was wrestling with the controls. If I were to recommend a few tweaks to the game, here's what I'd do:
1. Recover time. In the original games, you were invulnerable for a moment after getting hit and losing your rings. This would give you just enough time to get away from whatever had caused you to lose said rings in the first place, such as a bed of spikes you'd accidentally jumped/fallen onto. Several times in this game I landed on a row of spikes, lost my rings, and then died the moment I hit them again. A second or so of recovery time would have been enough to keep the life (and since it seems that getting 100 rings no longer grants an extra life and there are no 1-up's that I found, this was extremely annoying).
2. Animations. For the most part I was pretty happy with how graphically polished the game looked, but there are some things that I think might be a bit excessive. The 3 frames or so it takes to go into a crouch while standing still, for example, seemed very slow compared to the instant response we got in the original games. I know it's a really small thing to nit-pick about, but since the controls have a bit of lag in them as it is even small delays like this make the problem feel worse than it is. faster animations or simply shorter ones could help make the game feel a bit snappier.
3. Screen Size. I know that its displaying the images at their best resolution, but I've gotten used to seeing Sonic pixelated by now. Having an option to double the screen size would be a nice addition for those of us with big monitors who have to squint to see the difference between a plant and a murderous robotic penguin.
4. Control Response and Physics. I put this last on the list because I realize as a coder that it's probably the most difficult to fix. Without knowing exactly what equations the original Genesis games used to simulate the way things moved in Sonic games you're basically limited to guess work, and I'm betting the reason the controls are just a bit sluggish is more a limitation of the engine you're using than anything else. I mention it though because it feels close, very close, to being what I remember slowed down just a bit. A bit more tinkering and you might have it.
Other than that, I was impressed with the game. The level design, the basic progression of the game, and even the updated sprites brought back plenty of nostalgic memories. At a few points I even started double-tapping the spacebar and found myself surprised that it didn't make a Sonic 3 style shield come up. I sincerely hope you keep working at projects like this in the future.