What going back over the old demo and looking at this post did was remind me of how nice jsfiddle is when it isn't insanely slow, which then led me to wonder how hard it would be to create something like jsfiddle that lived on top of github would be, or something like jsfiddle that lived inside my favorite editor, or just in a static html page on my desktop.
If you get frustrated with jsfiddle, try out http://cssdeck.com/labs It's nominally oriented toward CSS and all the CSS preprocessors, but it handles JS just fine (and CoffeeScript, too!). I like its layout a lot more than jsfiddle -- it's more aesthetically appealing to me. It also features the ability to do codecasts. I can't recall if jsfiddle has that, but it's a nice feature for demonstrating code to someone.
I used to be a huge proponent of JSFiddle but it's got so slow and temperamental recently that I've started moving over to codepen.io. It gives instant results (every change is evaluated in real time), supports LESS and SASS on the CSS side, and CoffeeScript on the scripting side. And it's got a nicer UI, giving more space to the output pane and allowing quick switching/expanding of the code panes
