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A summary and links to discussions about what scratch teaches and does not teach

Here is a good pdf. At the end is a list of what scratch does not teach.
http://scratch.mit.edu/files/program-concepts-v5.pdf
The thread for that pdf is here
http://scratch.mit.edu/forums/viewtopic.php?id=789
Specifically, scratch does not teach:
functions
arrays
passing parameters
inheritance
file input and output
(and more)

http://scratch.mit.edu/forums/viewtopic.php?pid=40144#p40144
has a great summary
One of the problems that everyone must face is that Scratch gives students the impression that programming is deceptively simple. In other words, it is easy to do fun (but not particularly useful) things using Scratch. Another problem is that Scratch uses non-standard terminology for loops, which will increase the student's difficulty of making the transition into a more traditional programming language.

While Scratch is very weak in many of the things that are required of real-world programmers (data structures, OOP, 3D, file IO, etc), Scratch makes it easy to do many of the things that are fun but difficult in other languages (music, animation, etc.)

With the exception of Scratch and Alice, I know of no other programming language that makes it easy to do the fun things.