I was just writing an explanation when seeing, that Vuldacon in the meantime has answered your questions. So here in short:
1. You must distinguish between citygraphics that are shown on the map and City graphics that are shown in the cityview of the cityscreen (in C3C the cityview is only available in the standard game, not in scenarios or conquests.
2. In the citygraphics that appear on the map, the conditions for that graphics to appear are, as you were told in the posts above:
a) City Level 1 (what in the Editor normally is set to maximal 6 but can also be set in the general settings of the Editor to other numbers) and Bombardement defense >0.
b) For the next levels of a City set in the General settings of the editor, the images of level-2 or level-3 cities in the City graphics will appear.
Here Firaxis and unfortunately many, many creators of citygraphics did an important mistake: They show citygraphics of level-2 or level-3 cities without citywalls, what is completely nonsense, as the bigger cities in the ancient and medivial era nearly almost had bigger city walls than smaller cities.
This mistake results as the designer of the citygraphics (appearing on the map) of Firaxis and most modders of citygraphics are neither aware of logic, nor did they throw a view in the settings of Civ 3. As Vuldacon posted, the defense value for level-2 or level-3 cities is set as high or higher than a level-1 City with city-walls The defense bonus of a level-1 city in the general settings of the the editor is set to 0, so these cities need the construction of citywalls to rise their defense value.
So most graphics for cities on the map are completely nonsense as they show cities without citywalls, while these cities in reality have citywalls or massive citywalls due to the Setting of the defense Bonus in the General settings of the editor.
c) If the city graphics are set to magenta you will receive a city without any citygraphics on the map. I posted something about these "
invisible cities" in my first posts, I did at CFC. You will have a city at that place, but you only see the cityborders and the terrain and the resources beneath that city on the map. This can be very useful in some scenarios. I used that trick for the massive WW2 scenario SOE.
3. The story for the citygraphics of the cityview inside the cityscreen is different:
a) In C3C these graphics are only available for the epic game, not any longer for Scenarios or conquests as the screen of the cityview was used to fix a source of crashes "the cheap way", when modders use more luxury/strategic resources than there are available for the standard game. In the standard game the number of lux./strat. resources is below the level that causes these crashes.
b) The graphics of the "cityview" are connected to fixed entries in the pediaicons file.
Therefore in the next Version of CCM, where I try to mod the main-biq of C3C (and so have access again to the graphics of the cityview and the palace for my mod), the buildings must have the entry of the buildings that appear on a certain place of the cityview. Per example I replaced the graphics of the Colossus by graphics showing the Eiffel Tower. If the new graphics of the Eiffeltower should be seen in the cityscreen at the place and in the size of the Collossus graphics, The Eiffel Tower must be given the entry of the Collossus in the pediaicons file.
c) Unfortunately the programming of the cityview-graphics seems to be completely spoiled, so no more views of buildings can be added and only existing building-graphics can be replaced. Until now, nobody was able to add new images to the cityview graphics and to use the 10 user defined building slots that this "Baron Krypto" of Firaxis is speaking of without problems. Even Firaxis themselves were not able to use them correctly when adding the commercial docks and bunker graphics to their expansion sets, as they lost at least the Sixtine Chapel graphics when they added the other buildings.
