I just now killed this demon, and came here looking for this same answer, but found only the unanswered question.
So I did some experimenting and re-loading, and so far I notice only the following effects from drinking the blood:
VIT -5
STR +10
INT -5
Anybody see any other effects?
Kind of lame if that's all it does, and not worth failing the quest, I don't think. Unless maybe you use this in conjunction with a respec from mage to fighter or something...
My first post here, btw. Fantastic game.