Re: demo size
I think it unnecessary to try and pare the game down to 50 MB.
First, it's been over two years since I've seen a demo that small, anyone who deals with demos has long since gotten used to whatever measures are necessary for them to enjoy the bigger, better internet (cable modem in my case ;)).
Second, if you can really keep the core game in 50 MB, fine, but if it means that people will only be getting a very tiny slice of the game versus just limiting the amount of time they can play with a more or less full demo then it won't get their attention. If they download it at all, they'll miss the depth of the game and pass it over.
Third, if you've got broadband, then size is largely irrelevant, but if you're on dialup, the difference between 50 and 200 MB is just one more night tying up the phone line while you sleep. The guy who's willing to download anything over 10MB on dialup is willing to download almost anything under 300MB. The others will do what they've always done: get it off a magazine CD.
Fourth, since the greatest trick for this game would be to hook people with the demo and then let them buy and download it *that* day, I'd be thinking your core audience is the broadbanders and patient users of GetRight anyhow.
Re: sales from demos
I can't speak for Joe Sixpack, but for the "old" strategy gamers that this game is really targetted for, I think a demo would be very effective at generating sales. I purchased the game based on past experience with Stardock products and Brad's long time presence on CSIPGS, as well the overwhelming positive response there among some very nitpicky game curmudgeons. But, without that sort of exposure to the product and feedback, I have a hard time seeing anyone just picking this game up and buying it in a store or spontaneously purchasing the downloaded version based on an ad. But a good demo coupled with a decent advertising campaign would let the curious see for themselves before they reached for their wallet. When it comes to strat games, unless you know the developer well, or trust the word of mouth, it's quite a crap shoot to buy a game untested. In general, no demo means I wait until it hits the bargain bin, and maybe not even then.