No, there isn't a demo of that. It works similiar to the PhotoPost bulk add where you can upload all the images for a product into a directory and create entries for each photo (only one photo per product, though). It's not a comprehensive import producedure.
You can make it so people have to verify their emails, its an option.
It's not a short url feature, its a spider-friendly feature which uses slashes instead of script seperators. It works on most all Linux installations, but not all Windows.
I don't have any examples of a standalone version - there is one at http://www.photopsotdev.com
which is intergated with vB3 and a modified version at http://www.viperalley.com/reviews/index.php
which is intergrated with UBB.Threads.