I think the mistake people on this Forum are making about the XB360 demos' lack of AA and AF is that they seem to be making a comparison relative to PC graphics. There's no question when one compares COD2 on XB360 with COD2 on a good PC that the XB360 demo version is lacking a bit visually.
However (and this is the important point), when compared to Xbox visuals, the XB360 visuals are at least an order of magnitude better. It's very obvious. So, as far as console games go, the demos on the XB360 kiosks are just fine. Sure there is some aliasing, but I wouldn't say the textures look like crap at all, especially when compared to Xbox.