My voice at least is added to those in the "waiting on a demo before I buy" camp. Obviously, you don't want to release a demo until:
- You have the core game at a place that feels reasonable and decent to the customers who bought the game; and
- You have the demo at a place where it accurately represents the strengths and actual playing experience of the game
The longer it takes to come out with a demo, the less encouraged I become, but that doesn't mean that they're making poor choices, given the reality of limited developer resources faced in any IT venture.