Continuity mistake: When Westley and Inigo are duelling, Westley flings his sword so that it sticks into the ground and then athletically flips from a bar to where the sword is and nonchalantly reaches down and back and takes it out of the ground. But if you watch, he lands too far away from the sword to do this.
Continuity mistake: After Montoya has hauled Wesley to the top of the cliff, he drops the rope on the ground, where it lands forming a couple of coils. You can see this as Wesley sits down and Montoya leans up against the wall. However, when they start their duel, the rope is hanging straight off the cliff, without any coils in it.
Continuity mistake: After the grandfather has finished reading the book, he stands up to put on his hat and coat. The shot goes to behind him, and we see that he has already put his left arm through the sleeve. Then the shot changes again and we see him from the front as he is sliding his left arm into the sleeve.
Continuity mistake: When Inigo and Count Rugen are duelling in the banquet room, watch the Count's sword: after he stabs Inigo near each shoulder and draws out the sword it is clean. A moment later, as Inigo falls forward a bit and then rights himself, blood is seen on the Count's sword. If you watch both their swords during this entire scene you'll see the disappearing/reappearing blood.
Continuity mistake: When Fezzik falls to the ground after fighting with Westley, there is a very large rock right next to him. However, when Westley tries to roll over Fezzik, the large rock is too close to do so. Therefore, the next shot shows them further away from the rock so Fezzik can be rolled over.
Continuity mistake: During the first scene when the grandfather is reading to the grandson, he opens the book. When he gets his glasses the book is shut and he has to open it again.