When should the System Demo be scheduled?
As noted, the general pattern for System Demos is “team Iteration Review, the train System Demo”. Systems Demos are usually set up on a cadence just like team Iteration Reviews. So, for example, you might set up a System Demo “one week after the Iteration Review”. The use of a cadence here is a forcing function to ensure that we build an integrated solution and so can truly understand the progress of the solution we are delivering; we see a working system.
At a minimum the System Demo for this iteration should be completed before the end of the next iteration. Over time, because of investments in automation in the CI/CD pipeline, we should be able to bring the System Demo closer and closer to the Iteration Review. This usually means the train is improving their ability to deliver (reduce time to market, improve quality).