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Hello I am interested in CiviHR. Is this an extension of CiviCRM or should this be a separate instance?

I see here it has to be a separate installation. https://forum.civicrm.org/index.php?topic=33429.0

I tried to find the demo, but all of the links to the demo sites I have found do not go anywhere. Is there a live CiviHR demo available somewhere?

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When I last looked at CiviHR, it uses CiviCase's functionality to achieve to a lot of things. So having it as an extension on CiviCRM would cause conflict. It is designed to be a standalone application.

Demo links are indeed broken, you can signup for a demo here

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CiviHR is a set of many interrelated extensions. You can pick and choose among them for the functionality you want/need, though some depend on others in the set. Some of them can be added to a standard install of CiviCRM, but not all. I believe CompuCorp is intending to refactor the extensions so that they are all compatible with standard CiviCRM, but I am not sure about the timeline for that release.

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