When I try to install the Demo, a message box tells me the game needs 400mb of free space. Of course I do have that much space - just not on my system drive. *sigh*
Since I get that message every time, regardless of drive trying to install on, I reckon the required space just has to be on system drive - for decompression or don't-ask-me-what.

Now I would like to know: Is there any way for me to play the Demo without having to reformat my system?

is it possible to move some files from your system drive to any other drive than move these files back? (for example some files from programm files) ?
Also it is possible to set TEMP Windows folder to another drive.