Note: It is believed that once you download the PSN PKG file you can see it in the XMB and still (as always) have to install it.
The video does not show that, most likely because the installation would fail generating an error as it has since around the 2.4 PS3 Firmware Update. This is likely why the bubble is still around it when it's shown in the PS3 XMB.
However, the video does show the downloading of a file via PS Proxy. Feel free to comment below if anyone experiments with this further!
Okai, I therefore believe there should be at the console that the demo has already been installed before. This would be a good track to find a solution.. if there are new for this error that prevented me.