I only play one sim based on a real person, and that's my simself. It's less ego (I promise!) and more that I want to give her/myself the happier life I wasn't able to have. Very rarely does anything bad happen to my simself or her family up until death. Oddly I don't have a problem with her dying in game, maybe because of my age I've made peace with death. Not that I'm ready to go quite yet, mind you! But I try to be sanguine about it.
As for all my other sims, I never play premades but I keep them around for background color. Made over, of course. I rarely change their genetics, but they get new hair and wardrobes, makeup etc. Except for Christie Sigworth. That poor child grows up to look ... strange. Very, very strange. I have a base save that I created to start new games. All the premades are madeover and all the awful EA buildings replaced with builds from the gallery. I rarely download sims from the gallery though because I do enjoy creating them myself. My games are about 2/3 premades and 1/3 my own sims. They aren't based on real people except for one of my favorite actor who doesn't remotely look like the real thing LOL. I just go in and play around in CAS until I have something that pleases my eye.