After several run throughs of the demo to gather my thoughts...and several more just cuz i felt like it, here is what I think about it.
Sound: They had me from the PSmenu song. When a developer thinks it's worth it to include a song to play before you boot the game, I generally give it a listen. KZ2's got a great one. Epic and sweeping...slightly more suited to a fantasy game probably, but it still gets the blood pumping none the less.
I seem to recall hearing guns lacked punch or didn't sound meaty enough. I don't think this at all. The guns sounded appropriately boomy to me to provide the auditory satisfaction to the ballistics.
The voice over work, however, is just bad. Pretty much across the board, almost every line fell flat for me. The only legitimately amusing line came when pulling Garza up. He made a quip about "don't drop me like last time". I got a chuckle out of that, but for the most part the dialogue was the sort of lame machismo that's grown stale over the past several years.
Gameplay: This was the biggest question mark for me going into the demo. Alot has been made about the controls and whatnot. The way the characters move feels really fantastic to me. I mean reaaally reallly good. Aiming has a bit of annoying latency, but it's not significantly worse than other console FPS's. I am curious why console shooters tend to suffer more from input lag than pc shooters do. It seems like having a closed system in a console would make it easier to control that sort of thing.
As far as how it actually plays outside the controls, it plays great. It has a very satisfying connection between the controller, the gun, the bullet, and the bad guy. The act of shooting in the game just feels right, which a lot of shooters completely miss the mark on. The cover mechanic seems to work fairly well, and keeping you in first person helps keep you immersed in the battlefield(wihch makes the decision to use third person cutscenes seem rather odd).
Graphics: Lot to say here. First off, the good. Killzone 2 looks great. No doubt about it. It's one of the best looking games I've ever seen. The animation is probably the best I've seen in an FPS. It's almost unfortunate the bullets kick up so much dust that it often obscures your fallen foes, as you can't see them move around because of it. The post processing is also fantastic. For some reason the way the blur behaves when you're watching one of your drop ships speed away impresses me every time, and it has since the e32007 trailer.
Second, the particle effects. Theres sooo damn many of them. This goes a long way to giving KZ2 the look it has. And they hang in the air for a relatively long time. This allows them to build a sortof "fog of war" effect during a battle quite naturally. The end result subtly suggests that the scenarios are somehow more real than other shooters.
Now for what I was a bit dissapointed by, or atleast failed to be blown away by.
The lighting. A lot has been made about the amazing lighting of KZ2, and while at times it looks bloody brilliant, the dynamic shadows can often be quite glitchy and dissapointing. I would frequently catch shadows cast from my muzzle flash behaving in very strange ways that were certainly not intended, and transparent particles (ie:dust) are not properly affected by light sources (see MGS4 for a good example of what I'm talking about by "properly lit"). Lots of more advanced volumetric lighting techniques are simply faked and look slightly cheap (the sunrays being the best example, though they are much better than I thought they would be from videos I've seen).
Textures are great, but not spectacular. They represent probably the best these consoles can reasonably be expected to do in a game this size, but there is clearly room for improvement as tech moves forward. Models are great, but don't exactly blow away the competition. They are definitely high caliber models though, and are most certainly not "the ugliest models since oblivion".
Overall, every aspect of the graphics presentation ranges from good to spectacular. KZ2 and RE5 are both proving that these systems are quite powerful when harnessed properly. I'm having a hard time definitively saying that KZ2 is the most impressive console game, as RE5 is very nearly a match for it in my eyes, but it is certainly a match for any other, and later areas may (and likely will) push it over the edge. I was hoping to see the visuals of Crysis matched, albeit on a smaller scale, but that may have to wait for KZ3. KZ2 comes about as close as anyone has, but still can't quite match the overall splendor of Crysis, even though the scale is smaller. Crysis's lighting, textures, and models are all still yet to be matched when the game is run on high settings.
Don't let me be misunderstood though, KZ2 is without a doubt one of the best looking games in the world.
Overall the demo has allayed fears I had about the control while getting me somewhat excited to play the single player campaign(I was primarily buying it for MP, and still am). Eagerly looking forward to the full version so I can go online and kill you guys.