I purchased a game 'on demand' and have been playing it from a usb stick (full hd) just fine.
We have two Xbox in the house so I lent it to my brother to play in another room, it would not work, giving an error message about connecting to marketplace.
It does work on that machine when I sign in.
We are on the same family pack subscription
Are games on demand restricted to one account/profile?
I have tried to find out but there is no faq or help section for Games on Demand.