With WordPress multisite you can create multiple "sites" within the same WordPress instance. Each can have a different look, feel, theme, and plugins activated. Each works as it's own "site" in a network.
WordPress Demo uses the power of multisite to allow your visitors to create unique sandboxes for each "site" within your network. This also allows you to demonstrate different themes and plugins, all with the same WordPress install.
A sandbox is a carbon copy of your demonstration site where your users can try out every aspect of your product without affecting your main demo site. Sandboxes get deleted 24 hours after the user has stopped being active or has logged out.