What is the setting for Preferences, Recording, Video: 16bit or 32bit?
I always push it to 32 bit on install. Why this may be related to your problem? The recording of typing text is normall SWF-based, and will be converted to a compatible format when pubishing to HTML5. Better Video quality (it is not only valid for Video Demo, which may be confusing) can solve this.
BTW personally I never use Software sim in Demo mode anymore, always replace it by Video Demo because of its better quality and better editing possibilities.