First of all, the demo requires the 2D client. If you can run the 2D client the demo should be able to run without any problems. But the demo is rather old and has some detection quirks which makes the exeuction fail.
The demo client also contains a serious bug which will make it crash if the StartExePath registry entry is missing! And in some cases it will exit cleanly without reporting an error while there was one.
These are the requirements to make the demo run:
1) Registry Key requirements:
1a. "HKLM\SOFTWARE\Origin Worlds Online\Ultima Online" can only contain one sub key and this must be named "1.0". Any other key causes trouble so export and remove it/them.
Windows 64-bit users: Be aware, the registry key is "HKLM\SOFTWARE\Wow6432Node\Origin Worlds Online\Ultima Online"
1b. The StartExePath must exist inside the "1.0" sub key. And its content should be similar to the ExePath entry and should contain the string "uo.exe" or "godcli.exe". WARNING! StartEXEPath should not end with client.exe!
2) Game directory requirements:
2a. Inside the game directory you must have a directory "language", this directory can be empty so if it doesn't exist, create it!
3) UO.CFG requirements:
3a. The UO.CFG file must contain an entry "CdRomDataPath=XXX" where XXX is your game directory, the demo uses this directory to check the existance of map0.mul and for locating the tutorial (if available)
Running UoDemo+ is another seperate matter, please ensure that the original demo works and then review this topic : http://forum.joinuo.com/viewtopic.php?f=32&t=327
As an extra, this topic explains how to make the old tutorial work again: http://forum.joinuo.com/viewtopic.php?f=32&t=575
Edit 2010-08-04: added the correct registry key for Windows 64-bit...
