I just tried the demo of Terraria last night myself. In my opinion, since I can actually give it here, stick to the dlc. That was a horrible waste of 30 minutes of my time and hard drive space.
The demo is not a good representation of the game. After playing the demo I was going to wait until battleblock theater came out, but after I watched a few gameplay vids I decided to buy it. Honestly it starts off slow but once you get into the swing of things its fun. A la Minecraft