I've always been kind of sceptical of this 'no demo' feeling that floats around. I wonder if it's not so much that releasing a demo kills the final product, but more that the kind of people who aren't likely to ever really finish a final product are more likely to want to release a demo? I can understand the arguments in favour of the "demo kills motivation" theory, but then... I can understand the arguments in favour of the "videogaming/TV/rock music turns people into psychotic killers" theory as well, and I don't agree with that, either, for similar reasons.
Of course, it's impossible to really properly test, 'cause we don't have the luxury of multiple parallel identical universes to perform a proper control.
I do like your sprites. The only thing is that the last one's eyes look a little off-centre. The costumes are great!
Anyway - I'm not sure I entirely agree with the comments about character sprite positioning. Personally, I like to be able to see a bit more of the character, it makes up for the lack of peripheral vision that you necessarily have when rendering a first-person view in a restricted window.
I think the problem (with the last one in particular) is more a bad perspective on the background images than a bad positioning/perspective on the character.
Remember that when you have a visible horizon, that is the height that the protagonist's eyes are at, and if the character they're talking to is the same height (they will normally be pretty close, even if not identical) then their eyes will also be at the same height as the horizon. (Also in nearly all cases the vanishing points for buildings and furniture and the like will be on the horizon.) If the horizon is low on the scene (as it is in the last BG), it looks like the character is low down, and any characters with their eyes above the horizon (such as the figure in the last picture) look either very tall or as if they're standing on something.
If there's no visible horizon, then look for lines on any orthogonal objects in the scene which should be horizontals - for example, the flat top of the cabinet or the horizontal bars on the door that frame the panels in the first picture. If these slant upwards as they get closer (further from vanishing point, nearer to viewer) then they are percieved as being higher than the viewer['s eyes]; if they slant downward, they are lower than the viewer; if they're horizontal in the image, they're at the same height as the viewer. So in the first background the viewer is shorter than the cabinet with the horse statuette on, because the top of the table slants up as it gets closer. In fact, the viewer's eyes are about the same height as the bottom of the first drawer of the cabinet, or the middle bar of the door's frame.
I think that the habit for placing character's waists near the bottom of the screen so you barely see their legs is more commonly a (perhaps subconscious) attempt to match them up to the common horizon-half-way-up-scene, lots-of-sky backgrounds. Think about it next time you're walking around outside; most of the time, you don't actually see the rooves of buildings you're near, but you take in a lot of ground. You just don't think about it.
So, uh... is your protagonist very short?
Not sure the reason for that, but...it's better to avoid doing a demo if you can get away with it.
Looking forward to it.