According to Bryan, the demo is finished and is currently in the hands of Microsoft's certification team. Then, once it's approved by cert, it will be released to the Xbox Live masses. As far as demo specifics go, we're being told that it'll include 25 minutes of gameplay from the core game including a few Live features and the "Just For Fun" game mode. Sadly, the demo will not include any co-op support, local or Live, so we'll just have to imagine playing with three other piñata gardeners. Imagination FTW!
Gallery: Viva Pinata: Trouble in Paradise