My bike was ex-demo, had just over 100 miles on it. As it was coming from a registered Zero dealer and not just some regular used bike dealer I wasn't worried about it at all, they checked it over just as they would a new one. They even gave it a clean, if it wasn't for the numbers on the dash and some slight wear on the tyres (and a scuffed left mirror they took off a demo SR because it only came with one, although they offered to order in a brand new one instead) you would have thought it was brand new. They're not going to risk the bad publicity of someone paying quite a bit of money and getting a bad bike.
As for the warranty, as Zero writes it a demonstrator bike is one that has "been driven by or used by Zero’s or an authorized dealership’s customers or prospective customers, staff, managers or executives, or members of the press, but have never been registered within a European member state or country." Now, I don't know how it works in other countries but here in the UK even a demo bike, like mine, has to be registered to be ridden out on the road and I imagine quite a few other countries are the same. So, unless the bike was only intended to be demoed on private land, ridden around the parking lot for example, it's not technically a demonstrator bike. Thus, while my bike arrived at the dealer some time around August or September (judging by the date on the earliest log) the warranty didn't start until it was registered in October.
Also, for bikes actually classed as demonstrators the warranty is 2 year and 90 days from the shipment (5 years and 90 days for the battery and power tank), so they give you an extra 90 days or about 3 months compared to a non-demo bike. I bought mine at the end of November so I may have actually ended up having a slightly longer warranty if mine was a demo bike.