I'd have to respectfully disagree with the above post by MikeP.
I overstock heavily (you don't even want to know), and believe it or not, natural behaviors and aesthetic appeal (IMO, the more active, peaceful, coexisting life, the more Utopian it looks) increase. I find it to be true from there being no aggression among the fish in the slightest, no lethargy and many of the fish species even spawning on a regular basis. And yep, my schooling fish would still school regularly, and not out of stress. Everyone is active and their colors are bright as can be (though when I switched over to a heavily planted tank, that changed fish behavior, which is another long story I have talked on a few times in the past). I do observe fish behavior quite heavily and can definitely tell if fish are in distress, and none of my fish are stressed in the slightest, even though there is a ton of fish.
Can't say I'd recommend an overstocked tank to any average fish keeper though, as overstocked tanks do require a well versed aquarist to keep them successfully long-term.
In regards to MikeP's definition #1, I'd also have to not agree with that type of set up. Well, at least to a degree. I am all for nature, but the average hobbyist would not have, what I would consider, a large enough tank to appropriately house prey with predators (or community fish with aggressive fish), in the same tank. Even with plenty of plant cover/places to hide, it's just not a nice environment for the "prey" to live in constant fear/stress of predators in close proximity (in comparison to nature, where there is usually a lot more room to be safer away from predators). In a really large tank (how large depends on the size of fish and how the tank is furnished), this could be done, in what I may consider acceptable (if the "prey" have more a of a fighting chance to survive/get away and have more area to feel safer in, not having to constantly remain hidden or run away most of it's life to survive each day).