That looks a lot more like Ul'duh to me.
No that video is quite old and has no real correlation to FFXIV or a MMO in general. Specifically this tech demo was created to showcase the PC/360. They said it was just a technical demonstration using either DX10/X360 generation hardware to see what limits they could push. There is no evidence to show that this had any more to do with FFXIV than the FFVII tech demo for PS3 would to remake of FFVII.
Also it seems very likely FFXIV was built on a completely different engine being that they'd have to look into making a 360 version of FFXIV. PS3 doesn't seem to have an exclusivity deal if SE is able to say that. So it doesn't make much sense if they had FFXIV in mind for the 360 from the get go because I can't imagine Microsoft wouldn't embrace another FF on their consoles.
The music in of itself is incredibly reminiscent of FFX and the graphics really aren't that spectacular. Heck this may have even been made on a similar engine to FFXII it doesn't really have much better graphics. It might have been used for Infinite Undiscovery and then scrapped in favor of using the unreal engine on Last Remnant.