Actually, to be honest to our new friend here, I'm not sure if this has actually been answered before. I only got the Toyota demo a couple months ago (it being the only demo I can play on my stock U.S. launch PS2 with no modchip.. hehe), so I did a bunch of reading up on it. And I also did a bunch of reading on the DFP, since I'm enjoying my new toy since yesterday.
But anyway, yes, the 900 works with the Toyota demo. It's recognized right away, and the wheel will automatically switch to 900 mode when you start it up. As limited as the demo is, it does give me a chance to try out 900 in a GT environment. The only other game I have that supports 900 is TOCA2, but it's control scheme and feedback system is different enough to not really be adequate for learning to drive GT with it (although it's still nice to have the 900).
The demo was also adequate enough to prove a theory I had, that the driving (steering) aids are completely removed in 900 mode. The "dummying down" of the DS2's steering. Contrary to popular belief, this was always there in GT3, regardless of whether you were using the wheel. 90 degrees right at 150mph has a very different result than 90 degrees right at 10mph, just like with the DS2. I tested it by getting up to a good speed on the straightaway at Fuji, then jamming the wheel 1.5 turns to the right. Even at high speed, the tires did indeed turn ALL the way to the right, something I never would have been able to do with a standard DF wheel or DS2 (granted, I slammed into the wall because I was going waaay too fast for the corner, but it was only a test). This will be invaluable for the drifters here, since they'll be able to turn the wheels much further at speed than they ever could in GT3. Which should, in theory, allow for more spectacular drifts. I'm not a drifting man myself, but it's nice to know that level of control is there in any case.