In the same way that grocery stores give out free samples of products that you'll hopefully try and maybe even purchase, giving out your demo is a good approach to getting out the word (and sound!) of your music to as many people as possible. Besides the more obvious ways of handing out your demos at your shows and giving out copies to your street teamers to give out, here are some more unique yet amazingly effective ways to get your demos out to the music-savvy masses:
Donate to Libraries- Most libraries today have a nice collection of CDs of all musical genres to checkout patrons, so why not donate your own record to add to the mix? You can even talk to local school libraries to see about donating your CD. Making your CD available to the public is a great way to get your music out to a wide audience, and you're doing a good thing for society by contributing to music programs.
Give free copies to record stores. Your local independent music store will probably be happy to randomly distribute your demo to their customers when they make a purchase or have an area of their counter where you can stack a few and invite people to take one. What better way to deliver your music to the right audience than to put it in a store where people shop for music?
Leave at coffeehouses, lunch counters, etc. I found a book once on a bathroom counter that said "Please take me... I'm free!" I did, and later found a note inside encouraging me to either pass the same book along or to pay it forward with a book from my own collection. Why not try and do that with your demo? Everyone loves free stuff, and who knows the hands it will end up in? Make sure you attach a note to it, though, so it won't end up in the trash