Hi Dirk,
What can I say, A very impressive start! It really is a pity that you could not get it finished in time for the competition.

Assuming your code base is relatively clean and well structured, I think the engine has a lot of potential. It runs very smoothly on my laptop and main desktop machine.

I hope I can suggest some slight usability changes ( of course it is up to you whether you think they are good ideas or not ).
1. Use *standard* FPS keys for player movement ( W A S D ).
2. Mouse for aiming. This allows for the player to be running/moving in one direction while firing over his shoulder. Of course you will need to change your model slightly so that the upper torso moves independently to the the legs.
3. Use left mouse click for throwing and for close combat ( aka slashing ) it should be left click+left ctrl key.
4. right click casts the spell
5. q or e to use and item (potion or eye)
6. Space and Shift keys remain the same.
7. Any chance that the demo will be ported to Linux and MacOS X via FreePascal if you switch from DirectX to OpenGL?

As I said, your demo is a great start, I look forward to seeing it progress and evenually getting a commercial release .