Well firstly i want to say i love forza franchise. They are a successful sim racing game for a reason. One being mechanically implementating real life racing into a virtual life racing as close as it can be, and second the fun factor in the online gameplay/community
Finally the long wait for a demo of forza 3 was released few days ago. I thought it was a great game for a demo. Although it did not reach my expectation. Now it would be wrong to judge the Full game just off a demo. As forza 2 demo disappointed me too but the full version reached my expectation. So ill have to wait until ive played the full game to judge the full game.
But overall my judgement of the demo was great. Ill make it simple pointing out the pros and cons

Pros:
AI seems to have improved
Graphics has improved
The car felt alot more heavier, giving the less feeling of driving on ice.
It has cockpit view

Cons:
Cockpit view did not look as good as i thought, in comparison to nfs shift and grid
Damage model and mechanics looks similar to forza 2 sometimes worse. like if you get hit from the front but all the sudden your rear looks damaged.

In conclusion. I am even more excited to buy the full game, knowing the main contents im interested in was not in the demo (online gameplay, forza economy, car trades + tune trades, )