The original Magic On Demand idea was to have machines similar to Fast Pass machines at bus stops and you would insert or swipe your room key to request a bus. Computers would coordinate the scheduling and at bus parking lots a computer screen would flash the departure time and route for bus drivers.
The system has not evolved that far but instead "demands" are made only during heavy travel periods by a cast member monitoring the bus stop and/or by bus drivers whose buses fill up and who have to leave people behind.
During off peak hours buses serve bus stops at the usual 20 to 30 minute intervals although on occasion an additional bus will be dispatched here and there according to demand.
Magic On Demand could also save bus trips by allowing stops to remain unserved for hours if nobody registered a demand. One controversy centers around whether, if the computerized system were implemented and operating, swiping your room key should bring a bus "immediately" or "within 30 minutes".
Certain resorts (Port Orleans's, All Star's) may get more frequent service at certain times when for example shared buses running every 12 to 15 minutes is more efficient than separate buses running every 20 minutes.
Disney hints:
http://members.aol.com/ajaynejr/disney.htm
Imagine a traffic light where the traffic going the other way gets 60 seconds. (Neither of the following oversimplified situations are best but they do exist) Sometimes if you arrive and the other side has already been green for 60 or more seconds you get a green light immediately, at other intersections the 60 second delay does not start until you (or someone else going your way) get there.
