What timing. I'm currently reading "The Dream Machine: J.C.R. Licklider and the Revolution That Made Computing Personal" by M. Mitchell Waldrop. And when I got to the 1968 Fall Joint Computer Conference this weekend, I went and watched Engelbart's presentation. The book gives great context for the demo.
As a side note, I know quite a bit about the early history of computing, and I was amazed how carefully Waldrop navigates these murky historical waters. Highly recommended.
If you haven't, it's worth picking up "What the Dormouse Said: How the Sixties Counterculture Shaped the Personal Computer Industry" by Markoff and "Hackers: Heroes of the Computer Revolution" by Stephen Levy as well. The three combined come at roughly the same material from sufficiently different angles to complement each other quite nicely without getting too repetitive.
As a side note, I know quite a bit about the early history of computing, and I was amazed how carefully Waldrop navigates these murky historical waters. Highly recommended.