So I finally just played and beat the demo, after putting it off for so long, and I have to say, I'm mildly impressed, and wouldn't blame anyone who would want to pick this game up.
Maybe its because I don't play horror shooters, or a lot of horror games, but I liked it a lot. I liked what the developers pulled off on a visual standpoint, and the gameplay is good enough for what they're trying to deliver.
The highlights of the demo would definitely have to be the horror segments, with the quick flashes of the scenery changing, or whatever, along with the final segment where you get to drive around the mech. I'm highly impressed by the grainy digital post-processing effects, and how it convincingly looks like I'm looking through a camera.
I did, however, experience a technical glitch, where until I died and the game reloaded from the last checkpoint, I lost almost all sound, with the exception of ambient noise, so that was pretty weird. Even if it wasn't intentional, it didn't take away from the presentation.
I don't see myself buying this game anytime soon, though, mostly because I didn't play the first one to begin with, and I didn't really know what was going on with the story.
edit: I don't understand the hate in this thread. Why are people comparing it to KZ2 and such?