[Jerom]

Hmm...
Do you really need an inside to the house? If not, then why not make it so that the top layer of the house disappears when the current player enters? That would solve the warping problem...
As for the crap houses...just have alot of detection for each object, like the railroad tracks, only so that you couldn't lay object upon object on top of each other. The parts of the house that were blocking and the floors, could be tiles. The door, the roof, and the other things that disappear when entering the house could be made up with pics1.png.
If you've got any ideas or suggestions on this, post it, I'm sure it will help.

<edited> oh!! as for the houses ALL AROUND THE PLACE, just assign places that houses can be built, "plots of land"</edited>