Jostiq (no, uh, pun intended) has an interesting column (again, sorry) about the technical problems involved in convincingly rendering in-game sex. It’s a problem the gaming industry refers to as ‘collision detection’:
Some of the designers in the room had worked on fighting games and explained grapples that you see in games are all canned. Simon Strange, a designer on Godzilla: Destroy all Monsters, said, “Single point of contact between two people in games is already difficult enough. If you’re going to have people having sex, there is ultimate contact. How do you support their weight? There are multiple points of contact. That is the difficulty.”
Any gamer knows what they’re talking about. I’ve yet to see a really convincing handshake in a game, let alone any full-on nookie.
The state of the art looks something like the “Hot Coffee” hack (that link goes to Wikipedia, and is safe for work. This link goes to YouTube, and is not) in Grand Theft Auto: San Andreas, which is no more titillating that the puppet sex in Team America: World Police.