Beginners
The most important thing to consider is whether you are big enough to hold a straight flute. If you have to crane your neck and are having trouble holding the flute, the flute is too long for you. The good news is there are now flutes available with curved headjoints that make it easier for smaller kids to develop a good embouchure and good hand positions.
Beginning flutes are made to be sturdy. The manufacturers know who is going to be playing these flutes, so they have sturdy keys and springs. It is still important to be careful assembling the flute so that keys do not get bent.
Most dealers have several different brands to choose from. At this stage of your playing, just about anything will be fine.
Intermediate
Now that you have been playing for several years, you may find that your beginning flute is becoming more of a struggle to play because you think the sound could be clearer and there is a limit to how fast you can play. It is time to think about a step-up instrument. Most flutes at this level have open holes and a B foot.
These days there are a number of very nice step-up flutes that have a silver headjoint and plated body. This is a great choice if your ambition is to continue in school band or orchestra and possibly play in an ensemble in college. If you are more ambitious, want to take auditions for district and state festivals, prepare for solo competitions and think you might want to go to college to study music, get an all silver flute. The advantages of all silver are in both sound and responsiveness.
Some other important features to consider are
offset versus in-line G key,
and also the shape and placement of the foot joint keys. On some brands,
the keys on the foot joint are placed very far away. This may be a problem
if you have small hands. Make sure the foot joint
is easy to get around on with your pinky finger.
You may have the option of several styles of headjoint. If this is the case, be sure and try them all. Bring someone whose opinion you trust to be a second set of ears. It will probably be very clear which style works best for you. A few models at this level even have a gold riser (the chimney of the blow hole). This can make a huge difference in the power and projection of a headjoint.
Some brands offer a split E mechanism. While it does dramatically improve the response of some high notes, most repair people consider the split E to be problematical to keep in adjustment. Consider carefully whether you think the advantages outweigh the possible adjustment hassles.
Finally, several intermediate flutes now have the option of getting a C# trill key. As they say, it's the best thing since sliced bread, and if you can get one, I highly recommend it. On flutes at this level the difference in price is $100-200. See my comments below under Music Major.
Advanced
If you are becoming a really advanced player you now have many options to explore based on your ambition and how much money you want to spend. On a tight budget, often the best first step is to buy a new headjoint. There are many manufacturers, big and small, who sell headjoints to players looking to upgrade the flutes they are currently playing.
At this stage it makes most sense to look at silver headjoints, or perhaps a silver head with a gold riser. The riser is the small chimney that the lip plate attaches to tube with.
There are flutes in between the lower end intermediate and the handmade instruments. In my opinion, there is not enough difference in features to warrant spending the extra money. There are some small manufacturers whose handmade flutes are only $1500-$2000 more than the high end of the intermediate range. If you want/need a new flute, just get the handmade instrument.
Music major
If you intend to be a performance major, there is a huge range in price for handmade instruments. Chances are that if you do not already have a handmade instrument when you go to college, your teacher will strongly recommend you make the investment.
You can spend as little as $6000 and as much as $12,000 for a silver, handmade flute. Price does not seem to have a whole lot to do with the quality of the instrument, either in materials or workmanship. Shop around. Find out what you like by going to flute fairs, the National Flute Association convention and so on. Play a lot of different instruments.
A super add on to any handmade flute is a C# trill. I cannot imagine
life without it. It solves a host of problem trills, not just the B-C#
trill. Larry Krantz's web site has more information on the C# trill
key. It is worth the extra $400-500 you pay for it.
Professional
When you reach the professional level, you may find that you want to have a couple different instruments that have particular strengths. Many pros play gold flutes, as I do, because the gold adds a depth of sound not possible on silver. Platinum is also becoming a popular choice in flutes, headjoints and even risers.
Recently, wooden flutes have become very popular because some prominent players perform exclusively on a wooden flute. I prefer wood for playing Baroque music especially.