This weekend, I noticed a looping demo on some of the screens with what looks to be a teaser for WMVHD. What's that about? Is this yet another hd video format entering the fray?

Thats is Microsoft's HD format. It is older I don't know if they are still pushing it to the forfront now that HD DVD and VC1 are here.

I thought they had pretty much abandoned it, or at least weren't promoting it. It was a software decode of stuff stored to a regular DVD. There were only 30ish titles, most of them nature shows and stuff. It was kind of demanding on hardware, although I guess most hardware would be up to the task by now.

I seriously doubt they will try to revive it, since they are backing HD DVD.

It's a codec compatible with Windows Media Player on your PC.
You can download trailers here:
http://www.microsoft.com/windows/windowsmedia/musicandvideo/hdvideo/contentshowcase.aspx

I purchased the Terminator2 with the extra disc with the full movie in HD, and doesn't look that good. Or maybe I'm spoiled after having watched Blu-ray for some time now.

I think they will still use it for downloadable content...

As others have said, you need the proper software to play WMV discs. There are about a dozen or so WMV discs, but since no DVD players have the software, you have to use a PC. For a while, they were used (via a PC) to show off HDTVs. One of the more common discs was one of Hawaii.
J