Esp8266 limitations?

I ACTUALLY GOT REPLIED BY GORDON!

That's pretty normal here, he's super responsive.

I chose the esp8266 because of the massive 4mb flash - more than enough to store most projects.

Espruino loads the minified js into RAM - so your project size is limited by the RAM, not the flash. There is undeniably a significant overhead to using Espruino (vs, say, programming the chip in C) - but in exchange, you get to write javascript in all it's modern glory instead of C, and there's a js console that you can execute arbitrary code through in real time.

Also, does the dht11 sensor use analog input or digital?

DHT11 is digital, should be able to use any pin that you can setWatch() on. That said, they're pretty crap - you get what you pay for.

If you want PWM and wifi, and generally good chip features (hardware PWM on tons of pins, real hardware I2C, multiple UARTs, etc), have you considered the official Espruino Wifi? http://www.espruino.com/WiFi Ain't cheap - but you do get what you pay for (and Gordon will fix problems if you find them)

I use ESP8266's running Espruino all over the place - as long as the projects are fairly small. I've got a bunch deployed running my ping-pong ball lights, for example (where they're rock-solid stable, might I add), but I would not think of using them for a large project - I'd use a Pico or a WiFi.