from what I've understood, it sounds like the .demo files may be a text file. But I'll try that.
Ya that's correct. The .demo files are instruction files to the STO engine, it's the recpie for the instance you recorded. The engine builds all the graphics in real time, so that's what you have to record.
FRAPS may do it, not sure if it will run because you are not playing STO when rendering a demo file, but instead in an alternate environment that runs on top of the same engin.
WeGame may also work, it's free and has an HD option. It also saves directly to an h.264 video file in a .mov container, which I find works a lot better on YouTube and other sites over AVI.
1. We fire up STO, and point the launcher at the demo file.
2. Our game play capture machine has an HDMI out port, we bring that HDMI line into a Hackintosh with a BlackMagic Intensity Pro card.
3. We record that HDMI signal on our Hackintosh with the Blackmagic card's capture software.
I believe this is also how Cryptic captures a lot of the game play, based on the gear I've seen at their office. If not, that's how they should!
It's pure digital HD all the way through, with no compression. Crystal clear footage, makes it look sharp in the final episode of STOked!