I've reinstalled the demo twice - had it check to make sure the DirectX is up to date, but when I click on Launch Game, all that happens is that I get a white box for about 2 seconds, then the message "WallaceandGromitDemo.exe has ceased working."
I have Windows Vista Home Edition on my laptop. It's not the greatest machine in the world, but I played all the Sam and Max episodes on it with no problems at all.
Do you need more info? I hate to inundate you if you don't.