Maybe "demonize" is too strong of a word. Some people at TEA Part rallies carry outrageous signs that are either racist, make Hitler comparisons, etc. News networks are businesses, and racisms and fascism are easy to sell.
Racism is arguably only likely to occur among similar conservative movements, but Hitler comparisons are fairly common among any sufficiently angry group of protesters. I remember the media showing anti-war protestors with signs comparing Bush to Hitler, though the anti-war movement suddenly diminished when Obama became president.
Admittedly, I never get news from Fox, and most of my impressions of the network come from Jon Stewart. So I really don't know most of what they cover.