I'm experiencing the simliar results. I see the mainNav bar with "CityBars" at the top, and then it looks like the mask is being applied (there's an translucent overlay) but without the "loading..." text.
When I cut and paste the code from init to the launch function of the application, I get a grey screen (possible black translucent) without the mainNav bar at the top.
I really like the Sencha Touch, and Designer products. I really want to invest the time in learning how to use this framework, as I think it is far superior to anything else on the market, but this is the second tutorial I've followed that has been out dated (the other one being Ed Spencer's talk from Senchacon 2011). It's frustrating to spend half a day on a tutorial and have it not work when you've followed the instructions.
Other than the demo not working, this is a good tutorial. I do feel more familiar with the framework, but it is very unsatisfying that it doesn't work.