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This research work explains different aspects of PeerSim simulator used to create nodes and simulate peer to peer overlay network topology generation protocols. PeerSimhas been tested over various protocols specifically designed to work with a heterogeneous environment and its efficiency and scalability is evaluated considering different properties of the nodes and network. These protocols are used to introduce clusters for efficient resource retrieval, behaviour of cooperation and security. PeerSim has proven to be a very efficient and scalable test bed for the generation of nodes through gossip based protocol and implementing different protocols on the nodes generated. The aim of this paper is to provide a detailed description and evaluation of PeerSimthrough study of already implemented protocols, for the researchers working in the field of P2P networking.