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I have noticed in a particular genome sequence of a prokaryote that various regions in a sequence share similarity which is high(>80%) with known proteins. However, the start is not a methionine. Is this a dysfunctional 'protein' sequence? Or are there alternative codons which translate those regions without a Met or fMet for that matter?

Technically, do all annotations of proteins have to start with a methionine?

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    $\begingroup$ Which prokaryote are you referring to? This could be important for answering this question. $\endgroup$
    – Eekhoorn
    Mar 18 '13 at 10:08
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There are alternative start codons to AUG used in prokaryotes: GUG and UUG. Those still match the initiation tRNA and encode N-formylmethionine. The rare start codons are matched by wobble pairing.

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As far as I know it is a universal rule that the initializing sequence codes the amino acid Methionine (or, as you mentioned fMet in prokaryotes).

However, in very rare cases it is possible that Met is not coded by the expected sequence of AUG. This happens more often in mitochondria and prokaryotes, for example E. coli which uses GUG quite frequent.

For an overview check Wikipedia here. Papers to follow up are listed there.

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