The bad news: It is only available until July 12 - a few short days from now.
Sonic Generations features both Sonics in re-imagined versions of "classic" Sonic levels from the Hedgehog's 20-year console run. Levels are playable in both 2D and 3D versions, and include enhancements to each level based around Sonic's ever-expanding moveset.
The demo features the Green Hill Zone. You're only able to play as the old Sonic, which isn't a terrible thing considering that's where the blue speedster is at his best. This was one of the two levels on display at E3.
The demo is currently available on the Xbox Live Marketplace, but only to Gold subscribers. It should be available later today on PSN (it is already available on the European PSN).
