With Assassin's Creed hitched to an annual release schedule, Ubisoft has two things to prove in previewing each new game - first, how well it fits in with previous Assassin's Creed games, and, second, what it does that's new for the franchise.
My demo with Assassin's Creed IV: Black Flag was clearly targeted more toward the first proof point. A producer driving the game talked me through a 20-minute segment of open world play - where main character Edward is now free to accept contracts, sail his boat around, and otherwise do things that make him a pirate. Beginning from a small fishing village somewhere in or around the Cayman Islands, Edward accepts a contract to kill two Templar smugglers docked at the village. He finds them at a local bar, drinking.
The producer chose to take out the first with a traditional assassination - sidle up to the bar directly behind one brother, wait for the "assassinate" option to come up on the action button, and then take him out with a blow to the head against the bar. At this, the other brother took off running and got onto his boat to sail away (which happens way faster than real boats could actually move - but, eh, video game). The producer explained that he could jump onto the fleeing boat and fight the smuggler's crew to kill him, or he could run back to his own boat and sail after the guy (conveniently tagged on the map).
Boats are what Black Flag brings to the Assassin's Creed franchise. Assassin's Creed III first introduced the concept of sailing, exploring and attack with a ship - but Black Flag builds out this feature and adds new ship types, the ability to board and capture vessels, and a fleet-building mechanic where captured ships can be sent out on off-screen missions to bring back plunder than can be spent upgrading Edward's ship, the Jackdaw. While in command of a ship, players can give a handful of orders to Edward's crew - including one to take shelter when the Jackdaw is under fire.
The producer sailed after the smuggler and demoed the now-familiar long shot cannon and swivel gun attacks on the smuggler's ship. By damaging the ship just enough to cripple it (say, by knocking down the mast), he was able to pull up alongside it and order his crew to board and attack. This is where recruiting becomes important - the more crew Edward has, the more quickly they can dispatch the opposing crew of a ship (a minimum number must be killed before they rest will surrender). During the course of the game, Edward's crew can be killed at sea in many ways - meaning he has to replenish his crew pretty consistently, or get better about telling them to take cover during naval engagements.
After offing the smuggler and killing the minimum number of crew for a successful board, Edward received plunder from the ship and had the option to recruit some of the captured crew to his crew (there is no prisoner-taking mechanic). After receiving a pop-up list of achievements for the completed assassination and a plunder list, Edward appeared back at the helm of the Jackdaw and the other ship appeared to have just vanished, leaving nothing but an open sea for the producer to explore. He chose to steer to a nearby island, have Edward jump off the board and swim up to it to explore, and looted a treasure map from a marooned pirate's corpse. This generated another point on the map -- which the producer sailed us to after swimming Edward back to the Jackdaw.