The demo is quite short, around 30 minutes or so. I haven't played it myself but I've seen people playing it on youtube and it seems scary as hell(but hey, everything seems scary as hell for me it just need to be a bit dark and creepy).
The gameplay resembles that of fatal Frame where you beat the ghosts by taking pictures of them with your camera(in this game it's your cellphone camera). There are also hidden passages and various stuff that you can only find with your camera.
Check out DreadOut at http://dreadout.com/
And vote for them on Steam Greenlight over HERE
The devs, Digital happiness also made an indiegogo campaign to help fund the game and make it even better. So if you like horror games or is looking for a spiritual successor of Fatal Frame or you've tried DreadOut and want to help out the devs, check out their Indiegogo page over HERE