Can someone explain to me how a pit stop works and how to make one? Also, during a serious multiplayer race, are you requried to actually drive up pit road, or can you just click "pit" on the menu?

You have to actually drive into any of the yellow boxes infront of the pitstalls to make a pitstop. Hitting "Pits" in the menu removes you from the race completely, so if you want to win, you probably shouldn't do this

As far as I know pitstops don't work in demo, though.

Quote from AndroidXP :

As far as I know pitstops don't work in demo, though.

Um, yes they do.

I stand corrected then