I think a directors demo reel can resemble an actors demo reel.
Keep it under 2 minutes. Show clips of your work, each of which are no longer than 30 seonds. Quick title cards or tasteful subtitles for each project can work well.
Some people like to place music over the whole thing...but I personally think that ruins it. I want to hear dialog as well.
I would do a search online for reels...find one you like, and copy the style and pacing.
And lastly, don't put up any crappy work just to pad...only use things you're proud of.
I'm actually getting ready to put my actor's reel together, so I'm in the same boat as you.