I'd assume it is using hardware since it requires the latest MiniGL. 28fps should be playable enough for most people. As Thomas says, it needs optimisation.
But the fps in the time demos are always much higher than real-world fps.
For reference, my old Athlon XP 1800+ (Palomino) with GeForce3 would get something like ~120fps on Quake 3 time demos (best quality, 1024x768), yet in actual play there was lots of slowdown so I usually played at 800x600 when on the LAN.