PlaneShift is a game in open development, so it's not complete. The "Tech-Demo" line is to show that it's still a work in progress.
The server seems to have been jumpy lately due to the new release - they always carry a few bugs with them that we then have to smooth over. So if it's crashing every now and then, sit tight and wait for it to stabilize.
I'd like to know why it wouldn't let you create anything aside the Ylian male. Can you describe the problem in greater detail?