I've encountered this before at Coalesce. Enthusiastic member of a local band bugs you all night to play their demo - you do, and it sounds like it was recorded in a tin shed, at the bottom of the sea.
It clears the dancefloor (or in the case of the Yardstick demo, it clears the whole fucking venue - although the fire alarm did go off at the same time
). Or you play the song in the first hour and the band moan because you've played it when there's less people in.
Solutions:
1 - Bands record demo properly with half decent production. My mates band recorded a demo with a home digital recorder and the quality was good. If you don't spend the time, effort and money why should anyone else care? I'm not entirely convinced just bumping up all the levels on a computer and then re-burning it onto CD is the solution to every badly recorded demos problems.
2 - Give the CD to the DJ early on an let him play it when he feels it's appropriate. Accept that it will not be played at the peak of the night as it WILL clear the floor. Unless your bands fans have a syncronised dancing team.
3 - Don't dance to your own bands demo - it's like public mastrubation.
4 - Accept that 99% of the crowd in the venue won't give a toss.