Updates readme for AZD demo extension (#5123)

Updates readme for AZD demo extension

Author: wbreza

cli/azd/extensions/microsoft.azd.demo/README.md

@@ -1,3 +1,72 @@
 # `azd` Demo Extension
 
-An AZD Demo extension
+An AZD Demo extension with custom commands showcasing current capabilities of the `azd` extension framework.
+
+> [!IMPORTANT]
+> Ensure the extensions alpha feature has been enabled.
+>
+> Run `azd config set alpha.extensions on`
+
+## Installation
+
+Run `azd ext install microsoft.azd.demo`
+
+## Commands
+
+### `context`
+
+Run `context` within an initialized `azd` project.
+The command will show metadata about the current project, selected environment and any deployed resources.
+
+#### Usage: `azd demo context`
+
+### `prompt`
+
+Run the `prompt` command to see an example of using `azd` styled prompts within your application written in any language.
+This features UX as a service via gRPC.
+
+#### Usage: `azd demo prompt`
+
+#### PromptSubscription
+
+Displays a single select prompt allowing selection of an Azure subscription based on the current logged in user.
+
+#### PromptLocation
+
+Displays a single select prompt allowing selection of a list of Azure locations for the current logged in user and subscription.
+
+#### PromptResourceGroup
+
+Displays a single select allowing the selection of Azure resource groups for the current logged in user and subscription.
+
+#### Confirm
+
+Display a yes/no prompt for a boolean value
+
+#### Prompt
+
+Displays a standard text input prompt for options.
+
+#### Select
+
+Displays a single select prompt with configurable choices.
+
+#### MultiSelect
+
+Displays a multi select prompt with configurable choices.
+
+#### PromptSubscriptionResource
+
+Displays a list of Azure resources based on the current logged in user, and subscription filtered by resource type and kind.
+
+#### PromptResourceGroupResource
+
+Displays a list of Azure resources based on the current logged in user, subscription and resource group filtered by resource type and kind.
+
+### `listen`
+
+This `listen` command is required when your extension leverages `LifecycleEvents` capability.
+
+#### Usage: `azd demo listen`
+
+This command is invoked by `azd` to allow your extension to subscribe to lifecycle events within the current `azd` project and services.