Demo is basically another word for a replay. This data (known as demo data) can be recorded in either userlevels or in Ned. The data can be posted on NUMA map listings or on the Metanet Forums for other users to review, by copying and pasting the data either into a white box on the left side of the screen of the userlevels menu, or in Ned.
How to Record a Demo[]
Begin by getting the data for the level for which you wish to record your demo. Load the level into Ned. You should see the level in front of you. While still at the debug menu, hit '1' to begin recording. Then hit 'p' to begin playing. At this point, play the level as you normally would. When you finish, return to the debug menu. There should be demo data in the text box below the one for level data. This box is labeled, appropriately, demo data. This is your demo.
How to Playback a Demo[]
Play back requires both the level data and the demo data. There are two ways to do it.
1) Go to Ned, and paste the level data into the upper box. Paste the demo data into the lower box. Press '3' to load the demo. Then press 'Q' to begin playing the demo. Hit 'p' to watch the demo.
2) This method has easier play back itself, but there is a bit more initial setup. The data must be in the form $Level name here#Author#Description#Level Data Here#Demo Data Here#. If you have data in that format, go to the N main menu and click User Levels. There is a text box in the bottom left corner. Simply paste your data into there and click "Watch Demo"