It's been a while since I bothered to post to the general boards, particularly since the release of the Book of Vile Darkness, but this thread just calls to me.
First, as to the art in the Tome of Horrors. Generally speaking, I didn't care for a lot of it. While some of it was very experimental and expressive (like some of the dragons, which were almost done in a "gesturesque" fashion), a lot of it just didn't seem like the artists were paying attention to the descriptions. Baphomet looks really weird rather than frightening and threatening. The Cambion looks like a pregnant... something, not like a half human/half demon male. Geryon, while a cool picture, has no hair and does not have paw-like hands. This has often been the problem with a lot of the art out there recently... the artists aren't paying attention or aren't be instructed properly. Furthermore, some of the art is almost cartoonish rather than illustrative. Take a look at the Demodands in ToH and compare them to those offered in 1ed Monster Manual II. The latter version were illustrated in a manner that conveyed that they could almost be real, while the former look extremely simplified and child-like... not at all scary. If the goal in ToH (and considering the "1ed feel" mantra we hear a lot about, it wouldn't surprise me) is to capture the feel of the work in both the 1ed Monster Manual and the 1ed Fiend Folio, they certainly accomplished that. Both of those book have very, very cartoonishly drawn characters and monsters. The dinosaurs in the 1ed MM are about as cartoonish as the Demodands in ToH. Still, let's remember that art discussions are very much subjective and that some people may like some of the material in ToH.
As far as the name changes and whatnot... Well, I never cared for the names "Demodand" or "Daemon," even when I was playing 1ed. The names neither sounded frightening nor did they evoke the same fear as "Demon" or "Devil." My disgust with the names grew when, upon doing my own research in myth and religion, I found that there were other, more appropriate words that would not cause confusion like "ausura" or "archon" or "demiurge." Instead, these words were used for other beings that in D&D are either good (like archon and ausura) or just mundane monsters (like demiurge).
When 2ed came out and the Monsterous Compendium Outer Planes Appendix came out, I too was skeptical about this whole "Baatezu" and "Tanar'ri" thing. I immediately recognized that this was a response to the "anti-occult" elements that D&D dealt with in the 80s. I was also displeased with the attempt to make them races rather than spirit (although it could be argued that this was the case in 1ed as well, this perspective was intensified in 2ed). But, the power levels went up, better clarification and concepts were included, and an explanation as to why Evil hasn't taken over the Cosmos was provided (The Blood War). Also, the names (which I don't if they were made up or were drawn from obscure sources), while I wasn't hot about them didn't really bother me since I could still call them Devils and Demons. Sure, I thought Yugoloth sounded weird, but it was far more unique and engaging than "Daemon."
I think too many people are too unwilling to let go of first and second editions. While I think nostalgia is fine and all that, let's face it: there were many thing screwed up about 1ed and 2ed, just like there are problems with 3ed. It's one thing to have a preference for a particular incarnation and another to just jump up and conclude that one incarnation is bad because it doesn't suit your cup of tea. The fact is, each edition offered something of value to the game. Personally, I think that D&D has improved as new editions came out. There is little support to deny that 3ed, mechanically, makes a lot more sense than either 1ed or 2ed. There is also little support to deny that 3ed strives to capture the heart and soul of the best of both previous editions while maintaining its own integrity.
It's been three years now that 3ed has been out and I think it's time for all these people to stop whining about it and 2ed. All three editions are D&D. Neither 2ed nor 3ed would exist without 1ed, but that doesn't mean that 1ed was perfect and didn't need major work. Being first doesn't mean being best or being worst. It means getting something started with the expectation that things can and will be changed and/or improved.
So, Daemon or Yugoloth. Take your pick and settle with it. Necromancer Games has always supported the terms and general concepts associated with 1ed for good or bad (and the pictures are "bad" IMO). It's their right and choice. If you don't like Daemon, don't use it! If your players are unfamiliar with the term, great! Build the confusion into your campaign.
Now, let's discuss something important like why they bothered with Lucifer and why the Oinodaemon doesn't look disgusting or threatening!