1) No, I dont think you can play on demo servers with the full.
2) What you were seeing the demo version were textures of only half their full size. Instead of 512x512 textures in the demo, now the game has to load 1024x1024 textures in the full game, which is eating up a lot of system memory, and of course your FPS. They cut the textures down for file size reasons with the demo. Same thing with the UT2003 demo.
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