Well now that I've had a couple hours to digest the demo I think I'll compile my thoughts.
The AI - They're still completely brain dead.
Hard braking in high speed sections which caused me to have to veer wildly to avoid them. Their driving habits are suicidal, incompetent and slower than my partner who makes no attempt to drive quickly, "Ducks in a row" are back despite what we were told - at least in this build.
Skid Recovery Force - On by default.
I'll avoid the controversy surrounding this topic and simply state that SRF defaulted to "on" in the demo, it was also on for the hand holding lap with "Lucas" yammering on and on telling me how to drive (Which got my rather vocal as I wanted to get to the meat and potatoes of the demo) but I can't say I'm bothered about that.
Long and the short of it is, you need to go out of your way to set the game to realistic physics and that just absolutely shouldn't be the case.
Smoke and Shadow pixelation - gone.
I spent a great deal of time trying to get the Z to drift despite the incredibly grippy sports tyres, when I did I went through the replay a few times - I found no noticeable pixelation. It also appears that smoke is visible through the windows but I didn't get a proper look so take that for what it's worth.
Shadow pixelation in the cockpit was nonexistent, brilliant step up from the jagged edges from before.
Car models - Good in places, lacking in others.
The car models are looking great, until the replay decided I needed a good hard look at their playdough seats. The interior still looks very fake and had it's share of jagged edges.
Physics and Force Feedback - Great!
The wheel felt much more connected to the car in GT6, however there's something not quite right about it that I just can't put my finger on..
The tyre model really does feel much closer to reality than before with the tyres slipping much more like they should rather than the current snap.
Tyre wear wasn't something I could really test - but tyre temperature feels much smoother in progression.
Suspension feels good but I can't comment on it much with the tuning locked up - you really feel your suspension compressing and expanding much more through the wheel than you used to.
Visuals - Stunning but oversatured in places.
When I first loaded up Autumn Ring my jaw dropped - it just looks so much more fantastic than the screenshots led me to believe, and I had already thought it looked brilliant. There are odd glitches all over the place due to the early build but overall it's a very lovely environment and just so much nicer than GT5.
However there are trees on the side of the road that are sort of constantly raining leaves which makes me feel like I'm playing a pokemon game...
Human element - Still not quite there.
The intro cinematic does show promise as the humans act more.. like humans - but with no crowd on the side of the tracks that I noticed it's difficult to tell if they'll be continuing with the 2d minecraft cutouts.
Wheel rotation - Hands still lock at 90 degrees. (Gloves look nicer though)
Replay cameras - Far more impressive and more engaging.
UI - Absolutely lovely and a massive improvement.
Load times - Noticeably quicker and a great improvement over GT5's sluggish nature.
Sounds - Better in some areas than in others.
When they loaded me into the Leaf I wasn't feeling to happy, the tyre squeals still sound awful and were just made more prevalent with the electric motor - but once they let me use the Z I was overjoyed with how much meatier she sounds, it's giving me great hope for future improvements down the line closer to release.
All in all it's a very disappointing experience as a demo - but it did confirm and disprove a lot of my thoughts, questions and concerns