This is from a rant of mine on IRC a while back. It has been minimally cleaned up.
- tons of interaction issues
- if the content changes under the mouse, you click on the wrong thing
- timing is either too long or too short
- often not accessible
- everything but the first is not important, as it's often not seen
- obscures content by default
- maintaining them is hard
- they go stale very fast, especially for a project
- forced size makes either padding or reducing the message necessary
- do you click on the image, the text, or is there a link?
- is it just a bunch of images or is it really HTML?
- if HTML, is it going to overflow and be clipped or foul up the layout?
- if images, will it be translatable or editable?
- it doesn't work properly on touch-based devices (phones, tablets, Win8, etc.)
It's better to just organize the content on the page and make it all easy to look at and interact with (than to shove a lot of content into an animated area)
If you still insist on using carousels, then it's a very good idea to read this: http://www.nngroup.com/articles/designing-effective-carousels/
Also see: http://shouldiuseacarousel.com/