At the moment tests and demos in Xith are just the same thing, although in reality these are two different things.
Tests are really really small programs (maybe not even running in a loop, just doing a snapshot and saving it) that actually shows that one and only one precise feature is correctly implemented (and hasn't been broken). Tests are for developers
Demos are visually stunning apps that uses several features at once, intended for users to be attracted ^^ And to show what can be done with the engine.
Most of the so-called "Demos" are in fact Tests.
These are tests : http://www.xith.org/pages/core_demos.html
And these are demos : http://www.xith.org/pages/java_cool_dude's_demos.html