This is weird, I wrote a response to this, swore I posted, but it is not here.
Argh. Must have been eaten by one of the hydra puppies I snuggle with at bed time when I am at Mount Doom.
So, going to be briefer this time:
From my personal experience, hydra creatures seem to have a distributed brain/nervous system. I say this because if they were different individuals, then newly generated heads/brains in battle would be confused, scared, unable to properly control/adjust. Like a hydra puppy, or any newborn. Given that new heads seem to grow ready to go...I think memory/brain function is distributed.
Obviously there are some problems that this doesn't explain. Chop off both heads, 4 new regrow, ready to go. Crush both heads, without breaking spinal cords and they are dead, or at least dead enough that you can get away from them. Haven't actually sat around to see if the heads regenerate.
On the other hand, I've known some jotunn with multiple heads. They are always two people, often one is much smarter than the other, but not always.
On my third hand, demons with multiple heads---not clear--I would think they would be a single person as it's a "form" but many of them act like separate, or semi-separate people. I suspect that they are mostly one person trying to psych out/disconcert/distract those they are dealing with.
On the same hand, there are also plenty of demons with multiple personalities, so you could have a case where different personalities inhabit different heads.
On my fourth hand, there are two headed living dragons. I have seen both there. I think if they are hydra-dragons, they are basically like hydra's. If their heads don't grow back, then they could be two people. I do not know enough of those to say.
Demons, at least us lesser ones, regenerate continuously, but if we sleep we regenerate faster because it's a function of how much mana can we collect and dedicate (subconsciously) to regenerating.
This was seen in Book II Beta and will be seen in Book 3
Bigger demons, with large reserves can just reform, like Tom does. However, most of us do not have the reserves, or would be very heavily drained if we did that.