Just downloaded it, and while there are a few problems (obviously from it being a beta), it's pretty damn good.

I remember reading a discussion here a while ago about people wishing they could find the demo, so was wondering if it's been out for long, or if this is a recent development.

in the pool on this site they say that it's illegaly leaked demo
i found one on torrents, but i'm not allowed to send you the link=/

still i don't get why it's not allowed to distribute. nobody's losing any money since the project was canceled

It can't be distributed because the project never got to the point where the developers had to pay the licensing fee for the Unreal engine. If they let the demo out, even unofficialy, they would need to buy the license.

Still, it is out there, and worth getting if you stumble across it.