Usually no. The aliens in ben's watch are not usually sentient.
However in the epsiode "The Ultimate Sacrifice" it is revealed that due to a glitch in the ultimatrix several ultimate aliens achieved sentience. They lived inside the architecture of the watch growing to resent ben as he used their forms. Eventually they asserted their dominance and tried to kill ben so they could be freed from the watch. When the watch is taken to Asmuth he fixes the bug and makes sure no other forms become sentient. However due to not a little bit of Deus Ex Machina and handwaving the ultimate forms that did achieve sentience are freed and brought to a planet where they can live in peace.
So we know that the ultimatrix can definately create real thinking creatures with their own desires and emotions. Now you might think thats where it ends but actually when Ultimate Humongusaur was asked about his childhood he said his mother tried to eat him when he was born. Now whether he actually lived this or it was some Blade Runner-esque artificial memory is unclear but the show definately seems to agree whatever it is is highly unethical.
If you'd like to read more about the episode you can go here:
http://ben10.wikia.com/wiki/The_Ultimate_Sacrifice