Here is the information required to circumvent the Xbox Live demo download region lockout.
First off you should go to the passport site:
http://www.passport.com/. Make sure you are not logged in, and click on the "create hotmail account" link. Now, here is the important part, the site will ask you where you are from, select either Japan, the US, or Europe. Remember, this is the country where the demo is available, not where you really live! You will require some information regarding those countries so MS will allow you ro register the e-mail address.
Once you have filled out the info and applied for the Hotmail account, activate it and turn on your Xbox360. Press the guide button and choose "switch profile" (X Button). Now create a new profile, and a new Xbox Live Account, make it a Silver account instead of a Gold (so you dont have to pay). Next you will require the phone number mentioned above to use your passport. You could theoretically take care of all the passport stuff on the Xbox, but it will go much faster on PC with a keyboard.
Well, that is about it folks! Pretty sweet huh? The cool thing is that you can disable (they actually are disabled from the start if you have already a gold membership installed on your box) the auto sign for the foreign accounts, hence leaving your primary "Real" account hassle-free. Enjoy the demos!