The primary difference between the two genres is that WRPGs give the player an avatar to explore a world and/or story whereas JRPGs have pre-contructed characters and storylines. The main character is not really and avatar of the player, but a fully fleshed out character in a wider story.

From this regard, Demon's Souls and Dark Souls are both very much WRPGs, allowing the player to customise their character from the very start and allowing the player to determine how their avatar interacts with the world around them. This is the very core of why I'd consider these games more WRPG than JRPG. They may take influence from Japanese style games/culture, but then Bioware was influenced by FFXII in Dragon Age Origins, but that is still very much a WRPG. I also see just as much influence/similarity from Western titles as the games you mentioned above (namely Legacy of Kain, Darksiders, Dragon Age).

I'm afraid I do not agree because I do not believe having a preset character is tied to whether or not a game is Japanese or western. For example, The Witcher is an example of a western-developed RPG that utilizes a preset protagonist (Geralt), while Dragon Quest IX is a Japanese example of a RPG that allows players to customize their protagonist. At the end of the day, there is just too much variety between each developer of each region to reduce the genres to western and Japanese, which is why I generally don't refer to western or Japanese RPGs as distinct genres.

I'm not seeing Souls and DD as JRPGs, and that Deep Down demo sure hasn't looked like JRPG. So, no. J-WRPG most likely would be proper classification, if both country of origin and game style were to be taken into account.

First off, Demon's/Dark Souls are closer to adventure games rather then RPGs.

A better example of a JRPG that plays like traditional WRPG would be Etrian Odyssey which is basically a old school First Person Dungeon crawler with the characters drawn in Japanese flavor. Shin Megami Tensai is another example of a JRPG done in western style although I'm sure people will bitch because of it not giving the player the ability to customize the character's appearance it is more of a JRPG.

Really, it is getting ridiculous to try to define RPGs these days as just JRPG or Western RPG because all of them are getting mixed in regards to traits. Western RPGs are having more elaborate and expansive stories that once defined JRPGs. JRPGs are showing up with more customization and examples of real time combat that once defined WRPGs. If the only real difference between the products is the developer and maybe the budget do we really need to keep acting like there is a massive difference between the two philosophies?

I guess so, but I'm not sure when they'll do that.

This is what I was thinking, those sub-genres should be defined by their basic gameplay

Well for one thing, "jrpg" is far too generic a term. Take Falcom for example. Their games predate much of what set the standard for what is today considered the "jrpg" style, meaning Final Fantasy and Dragon Quest. Falcom games by and large don't play like those games, never have. Their games are their own thing, whether we're talking about the Dragonslayer series, or the Y's series, etc. Those are Japanese made games, but they certainly don't seem like "jrpgs" that people consider now. On the same token, what about a series like Fire Emblem, or it's spiritual sister series from Treasure, Shining Force? Those games don't quite play like traditional rpgs or strategy games.

The point being that even from Japan, you've got different flavors. There aren't merely "western rpgs" and "Japanese rpgs". So if a Japanese developer made a Skyrim type game? I don't know. But I don't think it should be considered a "jrpg" just because it's made in Japan. To me, these days, "jrpg" refers to games like the Tales series, stuff that is highly anime influenced, stuff that is "very Japanese". Not all Japan-made rpgs have that look or feel or gameplay to them.

That is only true for more modern games. The first Final Fantasy and Dragon Quest, for example, have you name your character from the get-go, they are basically a blank slate, and "avatar of the player" as you say. The same can be said for some early Falcom games. Or hell, even though it's NOT an rpg, the same could be said for The Legend of Zelda, where you name your character (even though he's "Link"), and Miyamoto's intent was always for the player to feel like THEY were Link, adventuring around in the game world themselves. That trait has been in Japanese games for a longtime. I think in more modern times, the trend started of having set characters you play.

well technically most of them can be traced back to early Wizardry and Ultima games

But Japan developers simplified them and evolved them in a different direction.

If western developers started making RPG's like Dark Souls or Xenoblade... I'd actually buy them.