Diagonal building makes building in horizontal and vertical useless most times.
Not for me in the betas so far; it all depends on whether that tile I'm interested in is on a 2, 4, 6, 8 path or a 1, 3, 7, 9 path, and that seems sufficiently randomized so far.
And about the organic thing, I can't see why cities that build in diagonal are more organic really (building in diagonal makes very easy to build cities with holes, which looks very very weird for a city).
I put the shudder quotes on 'organic' for a mushy stack of reasons, mostly related to how the game will motivate players to behave and not about how a mature city might look either on the cloth map or in 3D view. The "cities with holes" thing makes me want to digress into 'realism' talk, which isn't very important to how I feel about the pop site UI so far (real cities grow around and acquire 'holes' for all manner of reasons). The whole bother just deepens my desire for a garrison/work-camp option in addition to current town-founding.