I just looked through 2checkouts help desk and it does appear you have to add your products with them as well.
For the demo mode I do see an error that is causing it not to run. If you would open the file includes/functions_payment.php and locate this line:
PHP Code:
function display2Checkout($listingid,$price,$package,$extra,$exta2,$userinfo)
{
Just under it add: global $demo; so it would look like this:
PHP Code:
function display2Checkout($listingid,$price,$package,$extra,$exta2,$userinfo)
{
global $demo;