How much time do you think needs to pass before it is acceptable to record a cover song for a demo? I am working on a four or five song demo CD and was thinking about doing a cover of 'The Day That Never Comes' by Metallica (2008). I am not sure if it's too recent to throw my twist on it. What is your opinion fellow guitarists/recording artists? If all else fails I could maybe do 'Hangar 18' by Megadeth...

Weapon X
In my personal opinion, go right ahead mate!
As longs as you DO change the solos(except the harmony parts) and DON'T
change the basic structure of the song, you should do great!
Well, legally, music becomes public property 75 years after the composer's death. So, in theory, if you are selling your demo with the cover track on it, you are infringing on legal grounds, and you could, once again, in theory, be sued.
My band had the same problem. We do a killer cover of a The Science of Selling Yourself Short by Less Than Jake, and had tons of fan requests to put it on. However, at both the bidding of our recording studio and engineer, we decided to discontinue using the track, and wait to put out an entire CD of covers, which we're giving away.

So there's the legal issue.
I play guitar in a ska band.
Modded MIM Strat > Fender Tuner > Bugera V55HD > Custom built 2x12
I know about the legal issues but I wanted to include it on a demo to send out to record labels but I had no intent of putting it on a studio album without some form of consent. I am not selling my demo, just using it for a demo. I know Metallica are people I do not want to f**k with either but I don't plan on selling the song at all... What do I do?
Well, Jimi Hendrix did a cover of a song live, the day after it came out. I don't think 2 years is too soon

Any ways, as long as you aren't making any money from the recording, you should be all right.