I'd say Draklor is just about halfway, storywise. (Edit for clarity: leaving for Draklor, that is, so yeah, you're about halfway through the story I think.) It's a bit of a trek getting there, but there are also some great marks along the way.

It sounds like Demon's Souls would drive me crazy! I hate battle systems where I have to micromanage and where sudden death wipes out a whole lot of leveling. T and I used to play the Champions of Norrath games together, and that could be a real problem sometimes.