That theme music when you get into the game is really nice. It'd be nice to have diagonal sprites too. Buuut that would be a lot of work lol.
I noticed you don't place grass behind houses. I think if you use SHIFT-mapping you can make the grass go behind the houses too. Otherwise it has that "pasted-on" look.
I like it so far though. Looks like you have a lot of freedom to do anything, which I'm guessing inspired the series ^_^