Creo Simulate requires some extra steps to get it configured.
First your parametric.psf file (see more info (here)) must contain the necessary Creo Simulate license features of either MECBASICUI_License and MECBASICENG_License for Basic or 211 and 212 for Advanced, for example ENV=CREOPMA_FEATURE_NAME=PROE_DesignEss (211 212).
If you're using Creo 7, you are done. If you're using Creo 6 or below, follow the below instructions:
Next, you must navigate to the feature.dat file in the creo_loadpoint\Common Files\mech\text\licensing\mech directory that contains the features for Creo Simulate and modify it to have the correct feature names (see example correct pic below).
These steps will allow you to run Simulation directly inside Creo Parametric.
To be able to run Creo Simulate by itself, you'll want to copy the [LICENSE_IDENTIFIERS] and [FEATURE_NAME] line values from Creo Parametric (parametric.psf) to Creo Simulate (simulate.psf found in creo_loadpoint\Simulate\bin).