Having played both Demon and Dark souls, I think Demon souls was only better in that it flushed out the Maiden and the monumentals in a way which was deliberate and set the tone of the game. Dark Souls could have used something along these lines, but in every other respect it's the better game. From the improved enemy AI, to balance in the weapons and crafting, to the variety of locations and enemies, and don't forget the subtle lore in the item descriptions and placement of unique enemies and items. Dark Souls is just plain better.
That said, they both rank as my favorite games of the last ten years.
Edit: Also, if this has convinced you to pick this game up for the PC (it's often on sale on Steam for under $10), don't forget to get DSFix for the graphics and DSMFix fix for mouse and keyboard support. It wasn't a very good port, but the community has made it great.
DSFix: http://blog.metaclassofnil.com/?tag=dsfix
DSMFix: http://pages.cs.wisc.edu/~petska/