When you return from the Elizabeth Dane and find Heather waiting for you outside Venture Tower (assuming you ghouled her previously), after a short interval you begin to hear gunshots nearby. If you investigate instead of crossing the street and talking to Heather immediately, you witness a skirmish between what appear to be rival gangs occurring a couple of blocks away. I'm curious about whether that event still happens even if you haven't ghouled Heather.

It's not actually a scripted event. It just happens when the rival gang members roaming around downtown run into each other. You can see it as soon as you get to downtown, or it can happen later.

That's odd, because I found a Youtube video showing all of Heather's dialogues, and sure enough, you can hear gunfire in the background while you're talking to her in front of Venture Tower. That led me to believe that it was consistent across games. Also, it only happened the one time as far as I noticed.

If the timing is random, does that mean the location is as well? In my case, the fight seemed to have broken out in from of Confession, although the gangers chased each other both directions down the street and the adjoining alley.

Yes. The gang members are internally called Jets and Sharks :), and the AI is just set to hate the other group, so fighting can happen anytime and anywhere they meet. The worst that can happen is that they fight in front of Fat Larry who then joins the fight and sometimes gets killed...

Ha! Love it! Which is which? Oh no! (Does he consistently join one side against the other, or just attack both groups?)

--- They're bad for bidness. :)

I don't really remember, but it would be fitting for the bandana wearing guys to be the Sharks. He will just defend himself but I made him quite invincible to any first attack so he doesn't die from a random shot.

That's good! The game occasionally has you punching when coming out of the "c" key table. Accidently killed poor Larry with a single unintentional punch and had to go to a save. Actually, the same happened at the bloodbank but Vandel didn't get injured (just smiled). Kind of funny until he didn't appear after I freed Lilly and I had to go to a previous save. Some random bugs can be irritating. :)