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From my understanding, Lua is an embeddable scripting language that can execute methods on objects. What are the pitfalls to avoid? Is is it feasible to use Lua as an interpreter and execute methods in an web environment or as a rule engine?
Lua is very fast – scripts can be precompiled to bytecodes and functions execute close to C++ virtual method calls. That is the reason why it is used in gaming industry for scripting AI, plugins, and other hi-level stuff in games.
But you put C# and web server in your question tags.
If you are not thinking of embedded web servers – than Lua is not very strong. Lua is ANSI C – it compiles to native code, and as such it is not very welcome to your asp.net server, nor to your C# code. Think of ‘medium trust’ or ‘binding’ or ’64bit’.
Enough of pitfalls. If you are allready using C#, there is no reason to avoid it on web server. It gets compiled and cached. It servers huge sites like this one.