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Does Daemonic Instability prevent chaos daemons from embarking on rhinos?

According to the FAQ Draft, only for non-Chaos Rhinos and during deployment.

Do CSM rhinos have Daemonic Instability?

Embarking on a transport is not the same as joining a unit. You do not become part of the transport you are just inside it, much like a building. So Daemonic Instability will have no effect on embarking on any transport, provided the transport in question belongs to a battle brother codex.
The Chaos loving demons would not be able to get into the Rhino that your overly desperate Ultramarine allies brought to face off against whatever apocalyptic threat has forced this uneasy alliance.

edit: Since you can't get close enough to a non-battle brother transport to embark to begin with, 1" is much too far for boarding.

 Dorastus wrote:
Embarking on a transport is not the same as joining a unit. You do not become part of the transport you are just inside it, much like a building. So Daemonic Instability will have no effect on embarking on any transport, provided the transport in question belongs to a battle brother codex.
The Chaos loving demons would not be able to get into the Rhino that your overly desperate Ultramarine allies brought to face off against whatever apocalyptic threat has forced this uneasy alliance.

edit: Since you can't get close enough to a non-battle brother transport to embark to begin with, 1" is much too far for boarding.

I was thinking more in terms of chaos space marines rhinos.

Yes, they can embark into Chaos Space Marine or Khorne Daemonkin Rhinos, but (per the draft FAQ) cannot begin the game in them.

If the daemons were K.Daemonkin, and the Rhino also K.D.kin, then they could begin embarked (provided it was not a Dedicated Transport for some other unit).