The thrust of this engine has been towards modern Sonic games, so mixing 2.5D and 3D seems like the best combination for the demo. Sonic Colours or Sonic Generations style.
In terms of computer specifications, I say as low as possible. Obviously optimising while it's still in development is a bad idea, but we should always keep in mind that for every extra bit of power we require in the engine, another set of PCs will be cut off from playing the game. The most successful PC games of all time were capable of running on fairly low end (for the time) systems (Half-Life, the Sims, Myst, Minecraft, etc.), meanwhile the sales of the high-end Crysis were so low it forced the developer to go to console development.
In terms of what makes the levels pretty: Vibrant colours, nice art style, and preferably a level that hasn't been overused. If we could get an artist to design a new level that would be cool, but we could also go for remaking a more underrated level (I've loved Star Light Zone, but not enough colours and people may be sick of urban levels from Generations). Ideally, it would feel like a Sonic themed level, but be different enough to have it's own identity.
Level objectives: Defeat the badniks, get to the end of the level, run fast: Keep it simple.
Level design: Some open fast paced areas and more intricate places requiring platforming. Allow a few slow moving sections to be skipped if the player is skillful enough (a Sonic gameplay standby)
Showoff features: I'd be hesitant to put in specific show off features unless we know specifically want features we want to promote. Overall, the features of the engine should be shown off already: Good quality 3d, Sonic physics, Title screen & level system, running on multiple platforms, and actually playing as Sonic. Our core feature is letting people have an open source Sonic 3d engine, and as such our feature may be more the quality rather than anything specific.
Having said all thought, a nice big cinematic background animation could be used judiciously.
Just my thoughts.
This post has been edited by Sofox: 17 April 2012 - 08:25 AM