I'm very happy with the new cities. They don't need to be perfect examples of real medieval cities to fulfil their purpose.
In fact, there probably only so much realism that Toady can cram into them at this point. There may be some things that should wait until later on to fix certain qualities of the town. In truth, there are probably things Toady can or already have added that will make it harder for him to expand it later on.
On the contrary, you wind up saving more time just taking the time to do things properly the first time than doing things half-way, and having to come back again later. Toady's pretty clearly nothing if not ambitious, and just a look over the old "Power Goals" lets you have a real idea of how much of a simulated fantasy life Toady really wants in his world.
He wants sewers that thieves can skulk through, with caves with glowing moss, and dynamic quests to steal the duke's ring or have kings thrown into exile rather than outright executed.
In order to be the sorts of places that would make for an exciting adventure
inside the city, the city needs to actually have some sort of modeling to make it more than just a handful of random peasants who mysteriously got their skill levels by staring at the walls.
Toady is obviously still working on it, and has said he wants to throw in other features, like larger and smaller buildings, markets, and the like.
It's much easier to build the system when you have a better idea of what you want it to do later on. It's much harder and much messier to have to break apart old code to try to expand it in ways it was never built to be expanded. Building in access points for future expansion, even if those parts are dummied-out, allows you to easily expand the code.
It's what Toady did quite a bit of in the jump to .31.01, in fact. Much of the materials code was extra data that wasn't quite used, but which was added in, anyway, just so he wouldn't have to break the raws again to add it in later. Musicality is an obvious attribute with no use, but Toady threw it in there because he expected he would one day have a use for it.
Talking about ways in which the cities can be improved and expanded has plenty of practical purpose, even if Toady doesn't actually do all these things right now - it can give him the idea of what he wants to do in the future, and what sorts of concepts he has to build his system to cater to in the future.
A "Medieval Cities Generator" where the town is built looking like a real medieval town only sounds like a superficial detail if you're looking at maps. If you're actually building the simulation, and standing in the streets, looking at how people go about their day, then the physical layout of a town is just a single portion of the overall mindset of the townperson.
In order to make a town seem real, and really simulate a fantasy world, the actions that the townspeople take need to have some sort of observable logic behind them.
If, as Monk12 points out, they are all clustered around the keep for protection, then that implies a town that is frightful, and may be more wary of strangers - just because the new so-called "adventurer" in town is human doesn't mean he's not with the goblins - they kidnap kids and train 'em to betray their race, you know. I hear the goblins are gettin' ready to mount another siege, we best hide another stash inside the walls, so we have something there when we have to run for the castle.
A city built around a harbor or major trade crossroads, however, would imply an open trade city with a more cosmopolitan outlook on life. As long as they have coin, they're welcome to the city's best shops and houses, built right up on "The Strip" of the caravan roads and the area near the markets. If they run out, they'll meet the city's worst, in the back alleys far from the major roads, far from where the city guard dare tread.
The architecture and layout of a town says a lot about their values, and you can carry those implications over into the ways in which the game interacts with the player, as well.
Earlier on, hermes mentioned that the layout of the rural village was based much more on the quality of the soil that much else - and that's something that wouldn't actually be hard to model. The game can tell fairly easily how good or poor the soil is - that gets made and is tracked first off when a world is generated. Arid lands with sandy soil get more dispersed layouts, while river valley villages are clustered, while deforestation built-along-the-road villages are the type which are built along one long road, with farms fanning out behind the buildings.
It wouldn't even be a terrible stretch, compared to what Toady has already had to do to get this far, to have a few different patterns for building towns, and it would help tell different stories about the people who have adapted to different conditions. That would help avoid the sort of Daggerfall problem of having tons of procedurally generated towns, but where every town looked and felt the same.
And that is, ultimately, the thing that can really kill the excitement about cities - if every town is exactly the same, it doesn't matter what crazy stuff is in them, they're still going to be fairly boring after the first 15 minutes it takes to see all the things inside them. Toady isn't going to stay content with just those orange rectangle homes with nothing in them, but wouldn't that be an incredible letdown if that was all we got?
So let's encourage him to consider the ways in which physical layouts of towns can have an impact upon the social topography of the game, as well as just the physical top-down views.