Demonstration recordings are meant to show your talent in a positive light but are not always expected to have the final polish expected of a master commercial release. However, in today’s world, high standards are simply expected even with demo recordings. There is really no reason to turn out a recording for which you have to make an apology. Today’s recording technology can capture pristine tracks even within the most modest of facilities. The key to capturing a great performance is really found in the skills of your engineer.
When pushing past the demo stage, a recording usually will have much more thought and preparation and many times includes more elaborate production elements (i.e. more tracks, more players, more involved arranging). A commercial release for national distribution almost always is sent to a mastering house for treatment of its final sonic characteristics.