Nice demo! Presentation was nice, custom graphics are a huge plus. I was kinda looking forward to kicking Lucia's butt though. Glad he's evil. It seems we have similar ideas (such as ruined cities, demons and whatnot- one of my different story, and no time travel).

Characters:
So far Sparrow doesn't really seem like a villain. In the demo, it more or less feels like you'll be playing her for most of the game besides her ridiculously high level. She doesn't really come across as having opposing views to that of anyone else, because it seems like she's fighting to get rid of the demons.
I dunno. It's nice to play as the villain (Vacant Sky did it quite well) but here it feels a little off-putting. I didn't even get to play as Decibel.
Colin seems pretty generic, didn't get much of his personality besides him being a lot more conservative while Sparrow is a go-gettter type. He fit the situations well.
I kinda like the fanboy character a bit better than him though. He seemed to have real issues and problems.
Colin did start to develop near the end, but then END OF DEMO! Heh, is this how people who play my demo feel? Good grief D8.
Gameplay:
It was ok, but it felt ill-balanced at times. For example, the battle against four enemies, the ability to interrupt my ATB bar was a huge kick in the pants. Please remove that :'<. Having to reselect my skills is annoying.
The varied skills and on map abilities were tasty, for lack of a better word. Zero-shifting, C4, and the jumping minigame, all very very cool. Added lots of flavour! The fact there were graphics to match were fantastic, too. More indication of where to go would be handy- the maps are pretty large so you rarely know where you're going besides vague indications such as 'north'.
Graphics:
It's pretty sweet to see original pixel art, and it stands out pretty well too. Though the flow can be worked on (walk sequences are a pain amirite? I can see you've come miles from your first screenshots and it's amazing how quickly you've improved *clap clap*. Plus, each character had emotions and expressions, which was really great too. Your battle animations flow pretty well, though Colin looks like he's rubbing his gun off (sorry, had to be said). Some of the graphics don't match the enviroment too well but I understand the difficulty of working with XP graphics in modern settings. The demon graphics are particularly great- I especially liked that grabby claw! It was a sweet touch!. I'm not too fond of the cloudy overlay on the top and bottom, but it does look nice in some situations. I would suggest, if it's not too much of an issue, to maybe reduce map size a little. The laundry and bedrooms in the building with the claw-thing felt far too large.
You need to do a little work on the menu- it's barely readable right now. The clean, slick look you have going for your message windows- that'd fit the menu nicely! Why don't you try using that? :)
Music:
It was great to hear mainly original tracks! It's too bad I'm so familiar with Final Fantasy themes, or you would've gotten away with the street themes, because they were quite sweetly remixed (still midi though, I assume?). I don't think I was even supposed to recognize the Maybe I'm a Lion in the second one- but I have listened to that track in so many forms and remixes it would be a crime for me not to recognize it.
Besides that, the soundtrack was incredibly fitting! Modern, desolate, and enhanced the mood of the sequences. Though You're Not Alone kinda distracted me.