Yeah, it's just a static image, it always looks the same, and yes, it's supposed to show all the cities. The only things that change are the map markers that appear when you discover dungeons and stuff.
It's not only the static image, the city markers are there too. I can actually fast-travel there.
[img]http://dl.dropbox.com/u/179052/Cities1.jpg[/img]
[img]http://dl.dropbox.com/u/179052/Cities2.jpg[/img]
[img]http://dl.dropbox.com/u/179052/Cities3.jpg[/img]
[img]http://dl.dropbox.com/u/179052/Cities4.jpg[/img]
[img]http://dl.dropbox.com/u/179052/Cities5.jpg[/img]