I loved the demo. It looks like you guys have managed to capture some of the excitement and charm of the animated shorts and I am really looking forward to seeing it all in the context of the overall story for the episode. The look of the game is also really good. This feels like Wallace & Gromit.
Where I think the game fails is in the sound mixing. There are a few problems, but the biggest is that the sound effects and music drown out the dialogue and make it really hard to discern what the characters are saying. I am a fan of sound mixes that bring the music to the forefront, but it is always a balance. The music either has to drop down in volume during the dialogue, be written to be quieter or less busy during the dialogue, or written so that it doesn't trample on the same frequencies as the dialogue occupies so that the dialogue is still clear while the music is louder.
The sound effects at times were also too loud or too prominent in the same frequencies as the dialogue, especially during the scene with the truck where the wind sound made the Wallace's voice seem very distant and hard to discern.
Finally, while the music was great and had the right style to it, it is too busy. The music in the demo tends to have a lot of movement to it and a bit of an urgency or excitement, but during scenes of dialogue like out on the street it doesn't fit well. The music for the end scene in the demo was great as that was an exciting scene that benefited from the music that was used. The music out on the street when talking to the old soldier (can't remember his name) by comparison was very out of place. The style of the music and the themes in it made some sense given what he had to say, but not having heard it yet when you first approach him it seemed far to busy for the scene that you were presented with. Even after you hear what he has to say the music sounds as if the action should be taking place right then and there. The music could hint at the action to come, even picking up a little when he starts to get excited, but overall it needs to be a lot more laid back and in the background.
The way the music is now, and the way it has always been in Sam & Max, it doesn't really foreshadow anything or really take part in the storytelling, it is just background music that paints very broad strokes of mood – and not always the right kind of mood. I love the music in both of these series so far but in the game it would be nice if they were more a part of telling the story.
In Sam & Max the music often gets in the way of the dialogue and has many of the same problems that I have outlined here but it allows you to adjust the mix between effects, voice, and music so the voice track can be brought out and the music track dropped down to compensate. At the very least it would be nice to see these options added to Wallace & Gromit so that, all things remaining the same, the voice track can be brought out to compensate for the lack of clarity in parts.
Obviously I understand that these games are being done on a much smaller budget than big titles or hollywood film mixes. Still, I think there is a huge amount of potential for what Telltale can do with the sound in their games to make the experience and storytelling better.