Definitely.This is a topic I can really relate to.
With my disability I am often forced to observe life from the sidelines, although those of you who know me, or have just read my stories will know that I've lived as much of my life as possible centre stage, but people watching has for many years been a part of my life.
I've always found that you see people at their best or at least most entertaining when they are at leisure. Weather on holiday, at festivals, sitting around in pubs or bars, or just walking about.
I have to admit, and i feel confident that I'm not alone here, that the 'beautiful young things are the best to watch'. Whether this is a problem or not depends a lot on who you are with. If you are with a partner who for some reason is just not confident in your relationship, they can find your people watching very worrying, simply because of their own insecurity. If however the opposite case applies you can have great fun observing and commenting on people with your partner.
Of course watching people when you're with a good friend is worry free, you can laugh, criticise, gasp, lust and generally say whatever you like about the people you're watching, and of course two pairs of eyes are better than one, and you can draw each others attention to any little piece of behavior or glimpse of accidentally exposed piece of flesh worthy of observation.
I once had a buddy who made an art out of glimpsing what was meant to be concealed, he called it 'Blimping'
However often or for whatever reason you like to people watch, it is a fascinating and often pleasantly surprising pastime.