I make no claims of understanding anything about real world demons, which we must turn to scripture to battle! I was speaking strictly of the playing world that is provided with the Dungeons and Dragons pen and paper roleplaying game.
It's called Greyhawk, it's a planet of similar design to Earth (oceans, mountains, forests, deserts, etc) in a setting very similar to Lord of the Rings (there are humans, elves, dwarves, orcs and other things). The cosmology of D&D is based on alignment. There is Law and Chaos, Good and Evil - and nuetrality. That means there are different types of Good, Evil and Nuetrality Lawful alignments obey authority, the rules. Chaotic alignments believe do not respect authority, thing more personally. So Lawful Good could be seen as a person who obeys laws, works for the good of society and respects superiors and rulers. Chaotic Good would want personal freedoms and prosperity for himself and others. He would not respect authority if he disagreed with their position. Nuetral Good would fall somewhere inbetween those two.
The same could be said of evil. Lawful Evil, think the Empire from Star Wars. Officers obey their orders and work for the overall purpose of evil, rather than personal gain. Chaotic Evil individuals would care less about any rules, and anything they do is to please their own desires, no matter of what happens to others. Neutral Evil would fall, again, somewhere between those two extremes. Nuetrality has two variances as well. Lawful Neutral - Follow the rules, no matter if they benefit or harm the people. A perfect example of a Lawful Neutral character is Judge Dredd (british comic book character). He would punish a thief the same no matter if it was a starving man stealing an apple or a thug stealing a purse. Chaotic Neutral characters think only for themselves, trying not to make waves either good or evil. Think Han Solo when Luke and Obiwan first met him in Mos Eisley. FInally there is true neutral characters. THis is perhaps the most difficult alignment to roleplay. They are equally balanced between good/evil/law and chaos.
A creature's alignment helps define the types of actions that it would take in life. A lawful good character would strive to clear the land of evil, purifying the world of undead, demons and goblinoid evils. A chaotic good character might try to fight against the oppression of the government, fighting against tax collectors and unjust rule. A chaotic neutral character may join a party of adventurers if the reward looked worth the risk. He'd count his gold while the rest of the party healed the injured and all that. A lawful neutral character might seek to return a sense of order to a region overrun with marauders, seeking to return things to the way they used to be.
So, where was I going with this. Alignment in D&D isn't so much a choice with creatures as it's a part of their being. Therefore, it's rare to find any Red Dragons who are good (if any exist at all). Creatures that come from different planes of existance (other realms - the heavens and hells, etc) are so deeply a part of their homelands that they could never be of an alignment different to their basal nature.
So, evil isn't something that many creatures can be redeemed or saved from. Of course the DM is welcome to make any type of story he wishes. If you are completely unfamilliar with how D&D is played, PM me and I will explain in detail. If you have a negative opinion of it already, you've probably not seen it played correctly.
) world.
GO KELLY!!! GO KELLY !!! WHOOOOOOOOO! 
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