Actually I think the simulation of the town is alright. I was spying on my neighbors and saw them going up to bed, sitting down and eating through the windows, another was reading a book. I wasn't invited in so the objects were invisible but they seemed to be handling. I also saw a toddler playing with the activity table through the window. I'm sure they probably don't do anything when their house isn't in view but when it is, it seems fine to me. I haven't did the phone call thing but that is pretty lame, they faked it in the first trailer as always.
Yeah, they do go about their business when you're watching.
I tried the phone call thing awhile ago, I had my sim call Cycl0n3 Sw0rd while he was in the park eating a picnic meal. He stopped moving, just sat there, and got ++ over his head, but he wasn't talking on the phone.