What timing. I'm currently reading "The Dream Machine: J.C.R. Licklider and the Revolution That Made Computing Personal" by M. Mitchell Waldrop. And when I got to the 1968 Fall Joint Computer Conference this weekend, I went and watched Engelbart's presentation. The book gives great context for the demo.
As a side note, I know quite a bit about the early history of computing, and I was amazed how carefully Waldrop navigates these murky historical waters. Highly recommended.