Fraz-Urb'luu is the Demon Prince of Deception, detailed in the 1e MM2. I use him here as a specific example, but within the larger concept of demon/devil lords, whom are all psionically powered, and could be used in similar ways.
Incorporating a high level demon like this into your campaign might be quite fun. Even at lower levels, he would be a nice background figure for any campaign, directing evil minions in various nefarious schemes.
Keep in mind, demons cannot materialize on the earth without some human aid. The Demon Prince of Deception would be especially keen to deceive some hapless humans into providing him a gateway onto the earth.
They are capable of traveling ethereally on the astral plane. Thus, they could invade the dreams of the living, or cause other problems in that state. A demon lord might even stalk the land in his astral form. Animals and people with psychic vision would be quite freaked out, of course.
His presence in the land, even astrally, would cause all kinds of negative phenomena, not the least of which would be a pilgrimage of evil creatures who wanted to be in his presence or please him in some way. Naturally, some means of removing him would need to be taken if the land was to avoid desolation.
As an "astral battle" would be psionic combat, this is the perfect plot hook for a psionic campaign! Only the highest level characters could handle his physical form, but a psionic battle on the astral plane would be a great equalizer.
Fraz-Urb'luu would be an especially good candidate for the "demon invasion" scenario, because, according to the text, he was recently trapped by humans, and is not only looking for revenge, he is seeking his lost staff. A race to find his lost staff, and destroy it, would be a great plot hook.
Keep in mind, he can polymorph self at will, so he could be encountered in any suitably deceiving appearance. With his powers of illusion, suggestion, and polymorph other, he would be very fun to play for any DM who enjoyed messing with his players' heads.
Heaven help whoever is around if he attains material form, as he is by far the most physically powerful demon. He is 18 feet tall, has the most hit points of any demon (233), as well as greater strength (storm giant, i.e. STR=24), and his claw/claw/bit/tail routine causes a total of 30-64 hp of damage per round.
Note: saying his name in an ethereal state is 5% likely to catch his attention
HD: 20+ (233 hp)
Magic Resistance: 70% (with complete immunity to mental influence spells)
Psionic Ability: 233
Special Powers (20th level):
darkness (30 foot rad.)
telekinesis (1000 pounds)
once per day:
power word: blind
gate: Type 1 demons (25%) or other demon lord (75%)