If the speed settings are changing in the Options dialog, then the settings are working correctly. If you're leaving the game running, it can appear that the speed settings aren't having an effect, but they are. The speed setting does not change the speed of the villagers' movements.

One of the interesting things about Virtual Villagers is that what happens when the game is actually running is frequently different from what happens when the game is off. When it's off, the game state is calculated and updated at game launch, and game speed becomes an important factor.

When it's left running, game speed has less effect on the villagers' work. They do their jobs and produce tech points, food, etc. at whatever rate their movements allow, although the amount of food, points, etc. is adjusted according to the game speed setting. The game speed always has a direct effect on such things as nursing babies (although the timer does sometimes get stuck at zero for a short time), villager aging, and (to a degree) food consumption.

The game speed setting has no effect on the villagers' movements or work/play habits, which are determined by their walking speed and activity choices. That results in an inevitable difference between what happens when the game is running, and when it's off.