Making demons actually in the blades just makes it a bit too complicated, especially if other people controlled them so that's a no go.  As for the origin of the blades, the most likely scenario is that they were forged from rather powerful demons.  Because the blades are essentially formed out of the bodies of these beasts their essence is then trapped inside the blade, which is perpetually pumping out something like miasma which corrupts the users bodies.  While sealed in their scabbards the blades are relatively harmless, only minorly corrupting the individual over long periods of time; however, as a blade is in use the demonic essence easily flows into and through the person using, causing corruption at an accelerated rate.  Because of this mechanic, probably each user should have a regular weapon they use so as not to increase the cancerous demonic power for trivial matters.

So as for how the corruption works, perhaps something like this.  When a Demon Blade wielder gets their blade the curse starts right away, by means of corruption but the effects are miniscule at best.  The more a Demon Blade is used, the faster the corruption spreads.  The corruption could at first seem beneficial, perhaps giving enhanced strength and senses, but soon a wielder's mind becomes unstable and they start to change.  Depending on the level of corruption it might at first just be minor personality changes, becoming more reckless and ruthless for instance, but later the darkness starts to take its toll on the psyche, creating paranoia and hallucinations among other more extreme things.  If the corruption gets too out of control the wielder could essentially lose their sense of self and become merely a whirlwind of destruction and base emotions.

Now as the corruption grows there should be a way to combat it, otherwise it would only be a short matter of time before frequent users would fall prey to their darker, base desires and become demons themselves.  Not entirely certain how this mechanic should work but a few things that could help might be meditation, certain medicines, and perhaps acupuncture to help unblock clogged 'flow' paths to allow the corruption to leave the body easier.  I was actually thinking of making a character whose job is too look after the Demon Blade wielders to keep them from falling pray to their own swords.