I'm with Demon too and had a similar thing, connection would drop two or three times in a row perhaps more at weekends, tried new modems, rewired internal phone lines.
I called BT out, no fault - moaned at Demon to be told "not our fault" (by that nice Colin in New Delhi!). Eventually threatened to move my account unless the DSlam was checked at the exchange - suddenly a fault was found by BT and fixed. Now the line is giving me about 4Mb and I'm over 3km from the exchange - wow! However I still get some lag at weekends.
BUT my friend in Scotland who is also with Demon, suffers the same as you i.e. weekdays are rubbish and laggy - weekends not so bad (again despite new wiring and new modem) and has moaned at Demon and had the good folk at Anet help to no avail. The problem got noticeably worse for her during the Euro competition and the route log from the GW Diag option gave an IP that belonged to a Net TV company somewhere before Anets links.
It's worth remembering that Demon also provide the BB service for Sky TV I believe and I suspect that two things are happening...
A. their network runs out of bandwidth at certain times and tries to balance using alternative routes which are also busy
B. BT is currently upgrading their exchanges to ADSL2+ and so some lines are being shunted on to older DSLams to accomodate the change and they cant cope (hence my line zooming up to 4Mb).
Try talking to Demon again, if you have had BT out ask them to record in their logs what the engineer did (BT Wholesale can also see those logs obviating the "well its the line mate" problems) and insist that Demon request BT Wholesale to check the equipment at your exchange. They will give dire warnings of a 'call out charge' - but as BT will show, they have said your line is ok and your modem is working, the only place the fault can be is the exchange!
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