It depends on what you mean by "free demo". If you only mean the first hour or so (or allow to play until reaching a certain point), and then pay for further play, this is the standard shareware model under which most games are sold.
If you mean create a free complete version of your game, then once you have all the licensing stuff taken care of, release the same thing commercially, that's probably going to have a few more problems.
You could certainly promote it as "free until a certain date" or something like that and let people know in advance that you plan to charge for it down the track. That would go a long way to avoiding complaints about "why do I have to pay for it when you were previously giving it away? I'll just get a pirated copy."
If, however, you mean a full version of the game and then when you get the licensing stuff taken care of, make changes to the game so you're releasing an upgraded version commercially, that would be okay too. Just make sure people know the differences between the free and paid version (and that it's not easy for them to grab the resources from the paid version and shove them into the free version to get around your payment requirement).
1. That's the way I allways meant it, but writen it a bit dumb
2. If I would do it that way, I might would make may only one path playable instead of all.
3. There is actually a small problem I see for myself, because if I say it migh get commercial. Some might say in advance, they don't play it, because I have to pay in the end for it anyway. :/
But if I don't mention it, then the people may get the way you're saying. :/
That's why I thought about a free version too, because I really don't know, if my qualities are good enough for selling. :/
4. I guess to avoid piracy, the encryption scripts and the editor encryption is a way to do it.
One thing that would be only in the full version, will be for sure Steam Achievements, because I'm planning to greenlight it too.
I making you hard work with all the moving stuff in the forum with my wrong posts, really sorry for that. :'(
Another point:
I suggest waiting with the demo release until the game is almost complete.
If you release a demo and the players will have to wait a year until you have the full version ready, almost all interest from the demo will have faded away.
I thought so one time too, because people losing very quick interrests in things. :/
But I was thinking about updating the demo to a certain point and then say, full version release at xx.xx.xxxx. Or is that a bad idea? (\s/)
Sorry for the late reply, but had a lot of problems today, so I couldn't answer that fast. :'( /)