Demeteorizer uses "meteor bundle" internally. What it does differently is generate a package.json file from all of those bundled dependencies. It fixes the case where your development platform is different than your production platform. The native modules need to be recompiled. Using a package.json and npm install makes that really easy. Checkout the big red text in the Meteor docs on deploying[1].
Re:Meteor in Production
by mbenjaminsmith on Wednesday November 06, 2013 @04:22AM
(#6681739)
I never did get Demeteorizer to work so I can't compare them but yes the meteor bundle command gives you a Node.js app that can be deployed like any other.
As I understand it the former was created before the meteor bundle command was available.
The author mentioned that Demeteorizer allows a Meteor app to be able to run on any Node.js hosting provider. "meteor bundle" does that too. In last week's announcement about the Phusion Passenger app server + Meteor support, I documented how one can use Meteor bundles with Passenger. If you look at the instructions[1] you'll see that the instructions for deploying a Meteor bundle are the same as deploying a Node.js app.
So how is Demeteorizer different from "meteor bundle"?
[1] http://tinyurl.com/mj9ex3y