From my brief hands-on, it plays a lot like the PS2 game in 2D form. Hack & slash regenerating monsters, support characters, control combos for magic, etc. The main problem in the demo was that it was confusing how to proceed through the game... The action area was about 2 to 3 GBA screens long. In other words, you only scrolled a small distance to either side before reaching a dead end, upon which Sora & friends were teleported into another small area.
I kept clearing each screen of enemies and then the game would warp me back to the other zone, complete with more regenerating enemies. Going between the same two zones got old fast, but the game was in a beta stage and still in Japanese text if I remember correctly. I'm sure there was more to it, but most all of the impressions I've read on forums mirrored the confusion I felt in one way or another.
The small 2 or 3 screen-long areas instead of larger side-scrolling levels is the most troubling aspect, if it's a design decision that remains in the final game and not just a feature of the E3 demo.