Wow, old thread. Well, Kat's powers have changed since then, even if by a bit. She not got her powers by witnessing a failed exorcism which in this world involves someone who is possessed dieing. In this case, the person didn't die and the demon was able to escape and she trapped it in her soul before it could escape. The thing was that she was watching from a hidden spot along with a friend and Kat's possession knocks her out and so her friend has to hide her from the cult conducting the "exorcisms".
And yes, the powers are effecting her physically as she has to allow the demon to be in control in order for her to use the powers. The only reason the demon hasn't been able to fully take over Kat's body is because she's got Heroic Will Power
. It's a constant battle for control and with every demon Kat absorbs her inner demon grows in strength. The most horrific changes she experiences are eyes appearing on things all around her and nasty lizard like claws where her hand and foot used to be. Oh, and see my drawing of The Wiki Witch of the Web
to see what happens to Kat's eyes.