Before this gets confusing, let us fix the starting point of the discussion, as I believe there is a valid point in it we all have to be aware of.
- Skydemon does present a "GPS height", which is calculated based on the time distance of the GPS satellite signal at the speed of light from the synthetical WGS84 ellipsoid, which serves as a model for the earth shape.
- ICAO compliant aviation charts use WGS84 (currently corrected cycle -EGM96 spec) for AGL/MSL heights, which is why we have to make sure any other chart we compare to also uses WGS84-EGM96.
- aviation routing is based on barometric pressure, usually in GA established by simple linear QNH correction, without fine tuning and temperature calculation.
- deviation from GPS height to barometric height with exact and proper set QNH is usually neglected in GA flights.
If you fly on ISA setting in say an atmosphere with 10hPa off ISA, your altitude is off from geometrical height by about 300ft. In case you scratch too close to a restricted airspace Skydemon may tell you from geometrical height you are fine, but from barometric altitude you are not.
In any case, where you either fly above TL or with a QNH setting off real pressure (which does happen - once in a while you get a "cruise QNH" different from the local pressure) you have to remember that Skydemon is only a supplemental navigational aid and can not be used to judge wether you are legal or not! Skydemon can not replace any relevant cockpit instruments and you have to look at your altitude instrument. Never ever use Skydemon as a glass cockpit replacement, it is not meant and not built to do that.
So how does SkyDemon know the barometric altitude of the aircraft?
@AA: it does not and it does not need to, because it is irrelevant -> there is no simple or wishable way to tell Skydemon in flight which QNH you have been given by FIS. So, please - use your aircrafts instruments, not the electronicky gadgets, for these issues.
But frankly, it is indeed a bit misleading by Skydemon to present the, very helpful in planning, virtual radar also in flight, but if one keeps in mind the limitations - and altitude is NOT a parameter which can be taken serious for flight execution - it is a very good additional navigational aid. The usual GA flight below TL will be fine with this and I guess the vast majority of flights with Skydemon are these low airspace flights.
I assume we will see quite some improvements in gadgets like Skydemon in the very next future, given the fact that smartphones and tablets increasingly receive barometric sensors (which will add the next level of discussion between GA and GA-pressurized). I am looking forward to see a version of Skydemon make use of i.e. the iPhone 6 built in pressure sensor, but I doubt it will ever replace cockpit instruments.