I'm all for bands giving away demos. It's far more useful than trying to sell them at a fiver a pop and will attract more fans. But don't just do it at random, target who you're giving them to (ie people who are going to listen to it and talk about it) and you'll find your audience grow at the next gig. The lemon tree pay you 50 quid for a gig, that's a fair few blank cd's you can buy. Obviously it's all relative, and you wouldn't reguarly give away CDs that were costing you hundreds to record and copy. If you're spending 200 quid in studio time you'd be as well spend the money on a nice package and sell the result at gigs and try and cover some of your costs. But if you're just doing a quick 2 or 3 tracks for fifty quid or so then give the damn things away for free. Between 4 people the costs don't add up to much and it's well worth it in the long run.