This is my take in the Github Game Off 2012 contest. Without any ambition, though :)
You start with basic elements. You can clone elements and merge them to create new ones, and so on.
Current state / Changelog / TODO
Initial POC live at http://ozh.github.com/alchemy/
Elements will be computer related elements, combined to create new ones (example: Python + Perl = Ruby). Nothing random, just semi documented stuff (Wikipedia FTW if unsure)
Coffee will be a special element, available from start, used to improve on existing elements when no real combo is available (example: Fortran + Coffee = Algol) (yeah, I didn't know about Algol either, yet it's been part of the root of many things)
Every [interval or event to be determined] a popular character will be introduced and available as an element, allowing for new combos (example: IBM + Bill Gates = MS DOS)
This needs badges. People love badges. With a "tweet that badge" button. People love tweet buttons.
Tips in the notification box
Make use of Font Awesome. It's awesome.
Ideas for dozens of mixable elements. I think the game will start being interesting around 250 elements.
Sexy 32x32 icons for every element. Doh.