Back in December I mentioned that I had picked up The Sims 2 and that I was enjoying playing with it. At the time I didn't exactly give it a “glowing” review:
…Sims 2 is a lot like the original Sims, with better graphics. Mostly just that. I'd say that gameplay had improved (if it had) or that the annoying problems from the original Sims were gone (if they were). It's basically the same game with new items, new interactions, and so forth. In that sense… it is a lot like buying another expansion pack. That said, it is an incredibly fun game, despite its problems (incredibly slow load times, painfully stupid movement-pathing, and retarded Sim behavior when silly conflicts arise.)…
Having played it more since then I'd have to say that my original assessment was a little harsh. Movement pathing (when sims figure out how to get from point A to point B) is actually significantly improved, and part of dealing with the movement issues of sims is simply to build a house that makes it easy for them to get around. If you have lots of narrow stairways and halls, and places that require the sim to go through 8 doors to get to, you're probably going to have trouble. Given a well laid out house, the new sims do much better than the old ones.
Also, the incredibly slow load times vanish if you have a fast machine (or more importantly, a lot of memory.)
Yes the AI is still dumb. If you send two sims to the bookcase at the same time for example (to study cooking let's say), whoever gets there first will get a cookbook while the sim who gets there second will wait only the briefest possible time before complaining and waving its arms about because the other sim is in its way. By the time it is done complaining, the other sim may have long since left, but by that time the complaining sim will have forgotten what your instructions were and will likely go off to do something else.
However if you keep in mind the AI's limitations you can have a great time with Sims 2. The graphics are really impressive, much better than the previous incarnation.
Activities and Interactions
I'm astounded by the sheer number of things that sims can do and things that can happen to them. Sims can cook, clean, drink too much, watch TV, exercise, fall in love, dance to all manner of music, converse on any number of subjects, read e-mail, write novels, pay bills, shower, bathe, relax in the hot tub, have babies, fight fires, be abducted by aliens (possibly leading to pregnancy and the birth of a green-skinned alien sim baby), turn to a life of crime, science, politics, leisure, etc. They can garden, play games with each other or alone, help their kids with their homework, daydream, paint pictures, swim, talk to friends on the phone, order out for pizza, shop for clothes, magazines, games, groceries, have barbecues, throw wild parties, have sex in public places, get jobs, get fired, go to school, flirt with each other, fight with each other, move in together, split up and move out, grow up and grow old, and die in a number of different ways (age, fire, electrocution, drowning, sickness, being killed by falling satellites).
When a sim dies, the Grim Reaper (or Sim Reaper, if you prefer) shows up to collect their soul. At times like this their loved ones may plead with the reaper to let the dearly departed sim return to life… although typically sims who are resurrected become zombies who smell bad, act bad, and tend to be clumsy and break things easily. Sims who die leave behind a gravestone that the family can mourn at, or spurn, and occasionally such sims return as ghosts to haunt the home in which they died.
Sims always seem to have a surprise up their sleeves, and they will occasionally spontaneously engage in behaviors you probably wouldn't have thought of… such as juggling coffee cups or doing yoga exercises.

Neighborhoods
In the original Sims game, other sims who lived in houses in your neighborhood were the only ones your sims could interact with in a meaningful way. “Service” sims (the mailman, the fireman, the maid, the policeman, etc.) could not be interacted with. In Sims 2 this is not true any more, you can marry the maid, seduce the mailman, become good friends with the paperboy, annoy the gardener, you name it. The service sims, or “townies” as they are referred to are now every bit as real as the sims you make, and they can be persuaded to join your sim's family just as any other neighborhood resident could. This can lead to interesting situations. I had one sim who kept winning the hearts of the female maids who showed up to clean the house, and getting them to move in. Eventually this led to a depletion of the supply of female maids, and suddenly every house in town found their maids mysteriously replaced with male maids.
Fortunately you can create multiple disconnected neighborhoods and move families between them at will. This allows you to set up different kinds of neighborhoods and to experiment in different ways. You could make a community where you move all the aliens, or the zombies. You could make a “science haven” for the erudite, or a sleazy crime-center for your legally impaired sims. You could choose to download “nude clothing” for your sims and create a nudist colony. You could start a neighborhood with only one sim, and simply build families by befriending townies and getting them to join your sim's household. That's one I've tried myself, eventually building an entire community out of random-generated sims and their genetically combined offspring.

My favorite experimental neighborhood is a town I named “Cedar Isle Village”. Cedar Isle is only populated by women. Sims 2 is not a “conservative” game, and therefore alternative lifestyles are not hush-hush or taboo. The only males on Cedar Island are the random townies over which I have no control… well almost no control. I noted at one point that most of the townies were males, (largely because female townies kept marrying into or otherwise joining various households), and some of them were particularly annoying males who kept popping up at inopportune moments, spoiling parties, or what have you. Eventually I got so tired of them I created a special household called “Maneater”, inhabited by one female sim named “Scary”. When designing Scary Maneater I made her look as frightening as possible so that I would immediately recognize her if she showed up on another lot. I made her home look frightening too, surrounded by a moat, dead grass, dirt, gravel, and spooky looking joshua trees. Scary's job was to lure annoying male townies into her home where they would meet with unfortunate accidents… usually drowning in her swimming pool. That worked like a charm, and with the annoying male sims gone the game began spawning female townies again.

But I felt bad for Scary. In order to be best suited to her task she was fashioned as a highly sociable sim, and since everybody she became acquainted with died immediately thereafter, she really didn't have any friends to speak of and her social needs were not met. Further, her home became overrun with the ghosts of drowned townies who wandered the halls at night, leaving puddles of water, slamming doors, turning on lights, radios, and the television without warning, and generally terrorizing Scary who wasn't particularly thrilled with this turn of events. Finally, since she spent all her time wooing unsuspecting male townies, she didn't have time to acquire basic skills and set fire to her kitchen half a dozen times while trying to cook meals.
Poor Scary! I resolved to improve her sad lot, since it was basically designed by me in the first place. I found out that you can get rid of ghosts by selling off their tombstones–no tombstone, no ghost. So I removed the headstones from Scary's back yard. Scary had only one acquaintance who had not been knocked off, and that was Lauren, the firefighter who had come to her house many times to save the day. So Scary struck up a friendship with Lauren, eventually winning her heart and marrying her. Lauren it turned out, in addition to being a firefighter, was also a master chef and cooked amazing meals. Scary got a makeover, trading in her spiky red mohawk and warpaint for stunning auburn locks, shades, and some nice clothes… (plastic surgery is not an option, but with these accessories plus some decent makeup, Scary wasn't quite so scary.) Released from her odious duties, Scary took up painting and piano, made a bunch of friends, and she and Lauren lived happily ever after.

Modding
The modding community is out in full force releasing modifications for this game such as new clothing, new household items, changes to sim behavior and so forth. Some mods are truly impressive in their scope. One site makes available a mod called “Child's Play” which removes some of the adult aspects from the game making it more suitable for kids to play.
Sims 2 seems to be a lot friendlier to modding than the previous version. I would never have dared to try modding with the old sims, but with Sims 2 I've already created a couple new hairstyles (“strawberry blond”, and “dazzle” which is the wavy two-toned blue number shown at right), a few new eye colors (violet, red, and yellow), some new clothing, and my most ambitious mod so far, a new skin called “demonic”. This last modification gave rise to the “Demonas”, an otherworldly family that just recently arrived on Cedar Isle, here they are at dinner:

I'd like to take credit for the pointy ears, but those come from the in-game alien sims. But the skin, eye, and teeth coloring was all done by me. I may modify this skin to have creepy gothic makeup or strange markings, but for now it's a basic recolor. (Which involved modifying something like 20 bitmaps… no fun!) The Demonas are, from left to right, “Dark”, “Nether”, “Feral” and “Mercy”. Feral's hair is also custom… an excruciatingly red recolor of a hairstyle that comes standard with the game. Here's a photo album of the Demonas around their house. Be warned, a couple of the pictures are PG-13 and perhaps not safe for work.
Conclusion
I definitely give Sims 2 a thumbs up, and I hope the manufacturers produce a version of it rated E for Everyone. Right now it is rated T for Teen. But, with the “Child's Play” mod in place, and adult supervision, younger kids can definitely get a lot out of The Sims 2. Younger kids will learn fairly quickly that, unlike dolls, Sims have to be cared for. They need to eat, sleep, wash, go to the bathroom, and socialize. They need to go to work or school, and they have their own ambitions and desires and will become unhappy if they are not met.
One thing I definitely don't recommend is making sim versions of your family and friends. It can be very disturbing if a simulated family member or friend dies, or if something else bad happens to them. I learned that wayyy back in the first sims, when a simulation of someone important to me caught a lethal disease from a pet hamster and died. Trust me. That was not fun–sim death is not pretty.
The Sims 2 is published by EA Games and was made by Maxis. A recently released expansion pack “University” allows older teens to “go away to school” and live in a dorm. I haven't tried this but probably will soon. You can find The Sims 2 and The Sims 2 University at Amazon.com, and at other sites and retail outlets. There's even a Mac version available!
EDIT: Added a few graphics and cleaned up typos.