VTD-XML is a next generation XML processing model that is very memory efficient, fast, and capable of handling large XML documents. It uses virtual token descriptors to non-destructively parse XML into memory. Typical programming with VTD-XML involves parsing an XML file, moving a cursor through the document structure using XPath queries, and performing operations to modify or extract data from the XML. The demo shows examples like adding, removing, and traversing nodes in an XML document.