Genetics might have been more obvious in previous series of the game, but I normally find similarities and a certain variation, so I think there is some correct calculations and not just random. I have my own on-the-side DNA-string which also might help, but basically I will find that facial features is often passed down, but with occasional surprises avoiding that all grows up looking almost the same.
I also noticed that the eye-, hair- and skin color passed down is either one of the parents' OR the offspring gets the next alternative (left or right in CAS). So, in one family both parents had pale blue eyes, and one child got grey eyes because that is listed next to the pale blue option. The grey might again lead to green. Parents with brown hair might get a child with brown-to-red hair, because that version is next to brown in CAS catalog. Same with skin, child can get a version slightly darker or lighter than parents. I like this, although I think nothing will ever beat the genetics of TS2. I miss the possibility for a child to inherit a surprise genetic from a grandparent. In TS2 each genetic contained a double set (like in RL), but in TS4 it seems each has just the option that is actually visual, nothing hidden = no surprises. In TS2 a brown haired sim would pass on brown hair regardless of what color her hair was at birth. In TS4 the game sees dyed hair color as true genetic...
No matter facial structures, often the hairstyle, make up and clothes style are needed to make sims look diverse, anyway. I often add a shocking big nose or ugly eyes etc just to get more obvious genetics.