After carefully studying pictures of SNES cartridges, I think you're right. That's pretty funny that Boysel used game cartridges when creating the demo system for a patent lawsuit.
Not clear. They mention writing a custom loader, reading EXE files; whether that's calling the INT21h DOS functions or the INT13h BIOS disk loader is unclear. I don't see why they'd bother to write a custom disk filing system when you can just use the DOS one.
DOS is more something you run "on" than "in". It's just a filing and utility layer, no task scheduler, no memory protection.
It runs on top of DOS, using INT 0x21 to spawn the effect executables. The loader doesn't read the executables directly, it just decides when to start and stop them, plays music and bounces some text up and down while the effects are loading/decompressing/precalculating. Writing a demo that is it's own OS and has total control of the machine is definitely something like I'd like to have a go at in the future, though.
No, I think it is from the awful mess that was "Terminator:Salvation" based on the file name (I can't recall the screen from the film, but then again it's a film that it is best to just forget. Go watch Terminator: The Sarah Connor chronicles instead while waiting for T5):
