Algae can be made into a variety of biofuels, including biodiesel, ethanol, hydrogen, and biogas (as well as other materials). To add to your analysis, here are some pros and cons to algae as fuel:

PROS:
Algae grows in all directions
Single celled, no superstructure required for algae (roots, trunks, leaves)
Growth: 140 days for land crops; algae is year round, mature in 1-2 days
Algae weathers extreme conditions, is resistant to drought, wind, rain
Grow 30-100 x more oil per acre than corn or soybeans
No sulfur, non toxic, biodegradable
Can mix with existing fuels in existing vehicles
Can also produce bioplastics, medicine, nutrition, feed, fertilizer, more
Can absorb CO2 and other pollutants from power and cement plants, fossil fuel refining, fermentation based industries, ethanol production, etc

CONS:

Scale – difficulty replicating lab results into larger volume of production

Growing – using open ponds are easily contaminated, PBR’s (photobioreactors) can be expensive

Processing – challenges to harvesting & extracting oil

Carbon Capture – is it really feasible? Can the algae keep up with the output, and what about during the night when algae is not active? Can the waste be reliably transferred into the algae? Are the right growing conditions and enough land there to cultivate the algae? (“to fully use the emissions from a 50 MWe natural gas fired power plant land would require 2200 acres of algae.”) Additional nutrients are required, such as N, P, or K, which must be added in precise amounts and typically come from chemicals like ammonia or nitrate and phosphorous. Taking into consideration all of the processing, is there a net capture of CO2? Also, capturing the emissions it is not true sequestration, as it will be burned again as fuel.

Differing results from strains, environmental conditions, growing systems

If chemicals are used to extract oil or process fuel, exhaust can be toxic

Environmental Concerns – in scaled cultivation, especially of GM (genetically modified) algae – what if it seriously disrupts the ecosystem?

To learn how to make algae biofuels, check out:
Algae to Biodiesel: http://www.organicmechanic.com/algae-to-biodiesel/
Algae to Ethanol: http://www.organicmechanic.com/algae-ethanol/

For a look at the broad range of goods possible from algae and considerations for how to scale them up into entrepreneurial pursuits, check out Algae Business:
http://www.organicmechanic.com/algae-business/

Let me know if there are any questions about algae, or equipment to cultivate and use biofuels!

- Chris