Jay Winik spends a few pages describing the Confederacy's debate over arming blacks in the final months of the war in his _April 1865_.

Some people in the South talked about the possibility of using freed slaves as soldiers as early as 1862 and 1863. But such talk was generally denounced, and numerous opponents quashed anything coming from it. In November 1864 Jefferson Davis urged the Confederate Congres to purchase 40,000 slaves to serve as laborers, teamsters, and pioneers---with the promise of freedom as an incentive. Davis shied away from proposing enlisting blacks at that time, but expained, "Should the alternative ever be presented of subjugation or the employent of the slave as a soldier, there seems to be no reason to doubt what should then be our decision." The Confederate Congress did not act upon Davis' suggestion. (Winik, _April 1865: The Month That Saved America_ (New York: Harper Collins, 2001), 55)

Still, the manpower shortage in the war effort loomed over the Confederacy. Winik explains,"Within three months, the dreaded alternative Davis had raised now confronted the South, ominously and imminently. 'We are reduced,' Davis acknowledged in February 1865, 'to choosing whether the negroes shall fight for us or against us.' In the face of the Confederacy's rising peril, the president had finally made his choice---and it was unacceptable to many of his comrades. Georgia Robert Toombs thundered that 'the worst calamity that could befall us would be to gain our independence by the valor of our slaves . . . The day that the army allows a negro regiment to enter their lines as soldiers, they will be degraded, ruined and disgraced.' The president pro tem of the Confederate Senate, Robert M. T. Hunter, asked skeptically: 'What did we go to war for, if not to protect our property?' And Georgian Howell Cobb, one of the Souht's most powerful political generals, summed up much of the debate, fuming that 'if slaves will make good soldiers our whole theory of slavery is wrong. The day you make soldiers of them is the beginning of the end of the revolution.'" (Winik, 55)

As the war grew bleaker, however, some powerful men agreed with Davis, including Robert E. Lee. By mid-March 1865, Confederate Congress narrowly passed legislation to enlist black soldiers. However, Winik explains, the legislature did not approve emancipation as a reward because of the Confederate Constitution's protection of it. Davis, though, called for emancipation by "bureaucratic fiat." (Winik, 59)

As for the military demonstration you mention, here is Winik's description of it:

"On March 24 and again on March 26, thousands of spectators and an impressive number of Virginia legislators jammed the grassy hills of Capitol Square in Richmond to witness one of the rarest sights in all the South: accompanied by the stains of 'Dixie,' a new Confederate battlaion made up of three companies of white convalescents from Chimborazo Hospital and two companies of blacks marched up Main Street to begin drilling together. The Richmond papers enthusiastically reported on teh newly formed black company: in dress uniforms, black Confederate troops displayed 'as much aptness and proficiency . . . as isusually shown by any white troops we have seen,' boasted the Dispatch." (Winik, 60-61)

Winik goes on to argue that "it is a mistake, however, to see the final decision to induct and arm Southern slaves simply as a desperate last-ditch measure by a dying people, a pitiful deathbed conversion. In truth, it was the product not solely of haste but of an extended two-and-a-half-year on-and-off public debate throughout the Confederacy, and a four-year private debate. Some Confederates had been recommending it from the very start. To be sure, it was being done more for utilitarian reasons than for reasons of conscience. And there were a number of opponents, some quite vocal, and others who chose to remain silent. Nevertheless, it had, at times albeit reluctantly, the support of major figures and institutions: from General Lee to President Davis, from the Virginia Military Institutue to newspapers like the Dispatch, from the Virginia assembly and common soldiers to slave owners themselves. The decision was ultimately also a testament to the abomination of the institution itself, which many Southerners only belatedly recognized. Moreover---and perhaps most importantly---in March 1865, neither the South nor the Union knew with certainty when or how the war might end. As the Toronto Globe wondered aloud, would the black soldiers be ready for 'the next summer's campaign'? That was unclear. But whatever the war's outcome, the Confederacy had itself, by its own admission, now sounded the beginning of the end of slavery." (Winik, 61-62)

I slightly disagree with Winik. I believe he underemphasizes, to a degree, the last-ditch aspects of this formal enlistment of blacks. He is careful to clarify that this move was primarily utilitarian, but I do not think his description fully appreciates the embrace the South had of slavery at the beginning of the war. While some Southerners may have considered enlisting blacks as soldiers from the beginning, they were a very, very distinct minority (I do not know of any). The reason why men like Lee and Davis came to support black enlistment was specifically because of wartime necessities. Lee, though not a stubborn champion of slavery, had no interest promoting emancipation before such a move seemed to offer aid for the military cause. Davis was a much more vocal defender of slavery and had credited the institution with the elevation of both blacks and whites and the South as a whole. Again, only wartime emergencies and the specter of a Confederate defeat led Davis to consider black military service and freedom.

Ultimately, the move was a last-ditch effort, politically and militarily, for the Confederacy. Although, as Winik points out, no one knew exactly when the end of the war would come (or how it would end), by March 1865---when the Confederate Congress actually adopted a plan to enlist blacks (with a great deal of opposition)---the Confederacy was in shambles. Louisiana, Tennessee, and Arkansas were primarily in federal hands. Atlanta had been destroyed and Hood's army was no longer a factor. Sherman had marched unopposed across Georgia and was having little trouble moving through the Carolinas. The Confederacy's last major port for blockade runners, Fort Fisher, NC, had been captured. Lee was on the defensive trying to keep a stubborn and powerful Grant at bay only miles away from Richmond in losing siege at Petersburg. Some Southern governors, like Joseph Brown in Georgia and Zebulon Vance in North Carolina, had openly opposed Confederate government wishes.

I would not argue that formally enlisting blacks as soldiers in 1865 was a spur of the moment decision, but that it was something almost completely brought about and accepted through desperation.