Hey Charleei,
Not a dumb question at all! Starting with the demo game *is* the way to do it. Once you have your own character and room you can delete the demo ones.
Make sure you delete them from the PowerQuest editor (select it from the list and click the '-' at the bottom of the list). If you just delete the files, it'll leave references to them in the system and code, which might be why you got errors.
Let me know if you have any problems still.