I usually only make over townies when looking at them really annoys me, lol.
Sometimes I make them look better, sometimes make them more "ugly" (in a way that amuses me).
In one game I got sick of seeing VJ Alvi and his Groucho Marx-esque eyebrows evrywhere my sim went. I discovered that there weren't any really good eyebrows for him, & everytime I changed something it made a different part of his face look weird, so I gave up making him look good & just went with a "fish-boy" look for him, no eyebrows, eyes as far apart & bug-eyed as possible, his ears max size & sticking out, & I smushed his face flat with his lips sticking out.
In another game "Nicolle Ritchie" would boo & heckle my sim whenever she spotted her anywhere, since Nicolle lived across the street that was happening pretty much every dang day. So I edited all her outfits to full-body hot pink zebra stripes, put her in hot pink tiger make up, hot pink "mohawk" & unibrow. She still boos my sim everywhere, but now she looks hideous, so it's like revenge.
Some sims I have improved have been (adult) Arlo Bunch, he looks fine as a kid when the game starts out, but when grows up he looks like someone hit him with a frying pan. It wasn't too drastic of a make over I think I just changed his eyes & that alone put the rest of his face into better proportion. He isn't exactly "gorgeous", but at least he's now "average".
I've given various townies better hair too. For some reason Claire Ursine's daughter seems to always get a haircut that looks like short stringy strips of hair with a hairband...I'm not sure what hairstyle EA was trying to imitate there, but I doesn't seem to have been done very well, & haven't seen many sims that look good in it either, bleh.
Too bad I can't post screenies yet. *sad panda*