This topic received quite a bit of attention on the old forums and I didn't want to lose the information, so I'm transporting it here:
If the recommended Algeroth army isn't downright more powerful than the Capitol army, it certainly is easier to use. The end result is that Algeroth tends to win most demo games. Based on the games I've played and my demo experience, I've modified the armies to create what I believe is a balanced skirmish:
Free Marine Hero (Gold) (Upgraded from bronze version)
Martian Banshee Sergeant (Silver)
Ranger Elite (Silver)
Gold Order Token
Silver Order Token (Downgraded from gold token)
Bronze Order Token
Bait & Switch (Gold)
Fire at Will (Bronze)
Lethal Coordination (Bronze) (In place of Command Intercept)
In the recommended armies, Capitol doesn't seem to have enough firepower to make up for the hit point differential (15 to 6 in favor of Algeroth) and I've often found that I wasn't able to get maximum utility out of 2 gold tokens every round, so I dropped a gold token down to a silver and boosted the Free Marine Soldier up to a Free Marine Hero (they use the same model, so it isn't a confusing swap). I threw out Command Intercept since the only card Command Intercept works against is Bestial Speed. (The odds are that the opponent will only use Bestial Speed when their figure is more than 4 spaces away from you and paying the Buyback price probably isn't worth it in a skirmish battle anyway.) Adding Lethal Coordination to the army boosts damage and gives Capitol a card that might even be worth the Buyback price. The only down side to this is that you have to proxy the Free Marine Hero with a Free Marine Soldier. This bothers some people, even though the primary difference is the color on their base.
As for Algeroth, the army given in the FAQ seems to work pretty well, however, I prefer to replace Invoke Fury with Dark Aura. I find that Dark Aura requires a little bit more intelligence to use than Invoke Frenzy, which gives a better impression of the tactics involved in the game.
Necromutant Defiler (Gold)
Gold order token
Silver order token
Bronze order token
Dark Aura (Gold) (In place of Invoke Frenzy)
Black Technology (Silver)
Beastial Speed (Bronze)
The official word from on the old forums was that the original intention was that players demoing the game should simply use the same figure to represent Gold, Silver, and Bronze versions of the Necromutant. One other method to weaken the Algeroth army is to disallow the use of the NecroMutant Defiler's Mutation ability. Since FFG endorsed this type of proxying, I saw no problem in proxying the Free Marine Hero with the Bronze version of the same figure. However, if you are a strict adherent to the no proxying rule, killing not allowing mutation may weaken the Algeroth army sufficiently. Personally, I think that allowing for mutation gives a better game and a better demo overall.