Director Don Bluth would regularly view the in progress animation on it's original film format while editing on both a one inch display and in a full sized movie theater screen. Because of that, he was always disappointed with the picture quality of the subsequent versions of the game because the quality was never as good as it's film version until the HD version was made.
A scene cut from the game would've involved Dirk fighting a series of Gargoyles who would throw spears at him, as he navigated through some stepping stones and would finally find an exit inside a treasure chest. It got as far as pencil tests, and could've been remastered for the home video releases, but the scene just wasn't fun to play and remained cut.
The production company could not afford to hire models for the Daphne character so they used pictures from Playboy magazine for inspiration. Voices were also provided by the game's developers.
Although the audio was recorded in mono, 'Dragon's Lair' was the first video game with stereo sound. In the arcades, the sound effects from user input would alternate speakers.