I think you're saying the app will find them on the new drive.
As long as you tell the app, via the settings page, where to find them then it will indeed find them and use them. You can move them before or after telling iStripper about the new folder.
I use two iStripper models folders, one on my laptop's C: drive and one on an external drive. I keep the bulk of the animations on the external drive and a selection of my favourites and most recent downloads on the C: drive. If I disconnect the external drive then the program still works though, of course, it can then only play those cards that are on the internal drive. If I reconnect the external drive access to the full collection is restored and all of the cards can be played.
If you have iStripper on two computers you can use the same external drive for both or you can copy the cards from one to the other if you want to keep the two installations separate. Similarly if you only have a new installation but have the files you used for an older one the you can use those files or copies of them rather than having to download them again. If you have two installations you can download on one and copy the files to the other. All of this, of course, assumes that the two installations are for the same iStrpper account.
For a long time I had no good internet connection at home so I downloaded the cards when I was elsewhere, usually when I only had the laptop with me. As the external disc was then not connected the downloads would go to the C: drive.
At any time you can move cards between folders known to iStripper, or add new folders to that list and move cards to them without affecting the programs ability to use those cards.
They appear to have a .demo extension. Are there issues with this ?
I don't know. The .demo extension is also used for various transition clips and I have no idea whether deleting those will have any adverse effects. It is, however, OK to delete all of the files for any of the cards that you have not purchased.
There is also a setting "delete peer to peer files when deleting previews" which I think should keep you disk clean of any unwanted preview files. I also believe that iStripper has a limit tothe amount of disk space it uses for previews and will automatically delete old ones when it reaches this limit. Some time ago there was talk of Totem making this a controllable via a setting but although I am pretty sure they said it would be done this feature has not yet appeared. I think there may be registry setting you can tweak if you are that desperate to save a small fraction of the disk space used by the program.