What you show on your demo reel all depends on which studio you are applying for. You have to cater your reel not only to the studio, but more specifically for the project you are applying for. For example, I wouldn’t apply to Blue Sky with the work I did on Iron Man 2. I am proud of what I did on that film, but it doesn’t fit the style of the work coming out of that studio. So I would put together a reel with a more cartoony style, with some other styles peppered in. I think it’s good to show you can adapt to different styles.
Let’s say you haven’t done anything in the style of the studio or project you are applying for. If you have time, do a piece or two in that style. If you don’t have time I would send what you have anyway. I believe studios are looking more for animators that have an understanding of animation rather then style. Style is easier to teach than principles.
As for the actual reel, don’t make it too long. Only put your best work on it. Quality over quantity is definitely key here. From what I understand, a reel over two minutes is too long and a reel under a minute might be too short. I have also heard to start out with your second to best piece to “wow” them so that they keep watching, then finish with your best piece to finish strong. And, I wouldn’t get too fancy. Let the animation speak for itself. I don’t think it’s necessary to have your name fly in from off screen or anything like that. Also, if you have a dialogue piece – turn the music way down (if you have music in the background) or off for that section. It’s a bit frustrating to be watching an awesome dialogue piece and see the jaw flapping, but can’t hear what the character is saying.