PartyPoker doesn't have limits to the amount of chips you can withdraw, no. Play money games consistantly feature every player at the table going all-in before the flop. You'll see tables where the blinds are 20/10 and the average pot is in the thousands.
Playing limit-poker for play money is more realistic, but only a little bit. Now people can't go all-in on every hand, but they'll still call with everything that hits the table. Playing on the play money tables, there's no strategy at all... bluffing is impossible, and you're going to find yourself getting taken by more inside straights and river flushes, just because EVERYBODY calls to the river.
Play money games are like a face-up game of 7 card stud. No strategy, whoever is dealt the best cards is the winner on every hand.
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