That function and references to it in the customers.php last existed in core in 1.5.6c

Two fixes: remove the two sections in the custom customers.php referencing the function or stick the following back into admin/includes/functions/general.php

Code:
/**
 * Check if restricted-use demo mode is active
 */
  function zen_admin_demo() {
    return (ADMIN_DEMO == '1') ? TRUE : FALSE;
  }
if you stick the function back in you should probably add some additional comment as to why you put it in as reference for future upgrades