Well, there are a few schools of though on what exactly Silent Hill is. One theory is that the Silent Hill we see in the games is an "alternate dimension" Silent Hill, and that Silent Hill also exists as a fully normal town where people are going about their lives.
One thing that supports this idea is Silent Hill 4 - for Henry and a few others, some pretty messed up things are going on. But to everybody else, it is busines as usual. And when somebody dies in the "evil" dimension, their bodies are found in the regular world, and to the people who find their bodies, the world around said body isn't freaked-out or anything.
There are more, non-SH4 clues that support this way of thinking. For example, Laura in SH2. It seems that, for her, the town isn't all messed up the way James and others see it. Maybe for her, the town is normal, but for some reason she can see and interact with the others who are in the alternate town. Or, maybe she got pulled in because of her connection to James, but in the alternate town there are even more layers of "alternates," each of which depends on who the person is and what their "crimes" are. (Which would explain why everything is always burning for Angela.)
I'm not saying that I totally buy into the idea, but at the same time, it explains why certain signs of life are apperant in the town.


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