The word daemon is sometimes written dæmon, as they do on the website www.daemonnews.org (a
news site for all
BSD flavors),
for instance.
The letter æ gives a good explanation as to what this letter really means, although the instance we have here has more to do with the fact that English (and Latin) used æ in the old days to mark a diphthong, and not the æ that exists in some of the Nordic languages, namely Norwegian, Danish and Icelandic.
Another good example of æ used as a diphthong is Encyclopædia Britannica, and I've sometimes seen the name Eileen written Æleen. (again, read The letter æ for a good explanation!)
btw, there's also the E2user Ælien. (do I need to tell you where to look now?:)