Right, the trick is to convince
someone with hiring authority (try to avoid HR like the plague) that you can "add value"/do the job, and demos like this can go a long ways towards that.
For this approach I like the distilled wisdom advocated by Nick "Ask The Headhunter" Corcodilos (http://www.asktheheadhunter.com/), he really understands all this including the tech field, e.g. check out his great "Death By Lethal Reputation" essay on how a company destroyed itself through its hiring and personal practices: http://www.asktheheadhunter.com/halethalrep.htm
Quite a few years ago one of my biggest clients stopped me dead in my headhunter's tracks. A human resources manager at the company wanted me to tell her why the company's name was "Mud" among engineers in Silicon Valley. Actually, she asked me for a formal, written report.
"Too many job candidates -- engineers and managers alike -- are rejecting our offers outright, and even more of them refuse to come back for a second interview," she explained. "Management really needs to hear the truth, and I know you know what's going on."
Pre-Micheal O Church era, BTW ^_^.