Okay.. it's important to know that my belief and my conception of God came about as I was trying to answer very personal questions. As a result, my understandings are also very personal, and maybe not terribly helpful to others.
I think essentially, I forget the word, that everything is God.. there's nothing separate from anything fundamentally. Also, though, God is more than everything we have 'access' to as people. So, Evil is equally a part of God as Good is. God is not the God of everything good, God is the God of existence which encompasses matter and other rarer forms of manifestation, like ideas, and ideals. So.. we are limited to perception of differentiations in our normal state, and God's existence extends beyond that. All that 'who created God?' jazz doesn't register with me at all, because what's important is that God 'meta-created' existance and nonexistance. This is easy to say, but there is nothing to logically discuss about it, it's a waste of time.
So what is Evil, and what is a demon? Well, Evil is actually easily explainable when you understand that we are God also. Evil is really an effect of disharmony having to do with our decisions, Good is harmony, neither of which is not God. A demon is just Evil personified. This probably can happen a lot of ways, we tend to personify things in order to interact with them. I don't rule out the idea of external manifestations of Evil, but to me.. some sort of supernatural occurance is not any different than just somebody being a bad person. And neither is some sort of supernatural good force any different than somebody being a good person.