I pondered for a while whether to get this cable or not, as I really wasn't clear which on-demand services it was compatible with. After visiting a store to ask the staff, it seems there was a little confusion at their end too, which probably isn't Apple's fault per se.
Basically, this cable will only mirror the full audio/video of on-demand apps if the app-maker/content-creator allows it. I've tried it with a few different services and, contrary to what one other commenter here says, it does actually work with iPlayer. Well, I watched a range of TV shows from my iPad Mini on the big screen, no issues, but that's not to say there won't be some shows that won't work if there is rights-related issues.
I tried it with LoveFilm, only the audio worked. With 4oD, nothing worked at all. Luckily, the main player I wanted this cable fore - Eurosport Player - does work with it.
So yeah, if you're looking to stream content from on-demand players to your TV, just bear in mind some work, some don't.
I'm giving it 4 stars because it's mostly fine for my needs, and it does actually work for content stored on the device itself, as well as YouTube and the likes. I just wish Apple would put a warning somewhere in the product description explaining the issue with on-demand - I bet a lot of folk buy this cable only to be disappointed.