I agree with bluewall21, although I think the demo was to demonstrate the ability to run large amounts of character models with relatively OK detail. That said, the fact that they all run in a relatively straight line without any other animation going on (they are essentially duplicates of eachother), no enviromental influences such as some character models moving over or around enviromental obstacles (boulders, explosions, etc), and the general "plain-ness" of the demo - kind of detracts from the supposed AI thing.
Maybe if the their Brilinear Filtering was turned off, everything would be better. ;-)
Cheers,
EnochLight
*expecting his XT800XT PE any day now*