This could be a result of conflicts with the Recovery Menu and the Demonstration unit itself perhaps.
BTW the password to unlock PlayStation 3 Firmware 2.5 Demo units is 6258. ;-)
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Sadly yes, for the moment you are stuck with the firmware. Without going into too many technical details, the DEMO units are identified by a flag (just like a retail, or a TEST etc), so it will not allow you to install the Retail FW on it.
Basically, you are stuck waiting for an updated firmware.
I have a demo unit like the person above. so are we stuck with this firmware? i would really like to use the my home and playstation store features, even when unlocked i do not have access to them when i called sony they acted like they never heard of a demo unit. Is there nothing we can do to get a retail firmware on it? i tried to download the 2.53 and put it on a sd card but it dosent recgonize it as applicable but the US version of the 2.53 link was dead so i had to get the AU,could that be why?