I know only certain zwave switches actually report when a switch is manually switched, is insteon like this too or does it report as soon as someone switches the switch.
Does light switches send an update to the controller?
For insteon, as long as the dimmer / switch is linked up with the plm, the plm should be notified of the state of the device. In other words the plm will act as a responder for that device. The only way to get instant status for insteon on vera is to use the altsteon plugin developed by user fba. It offers better support than the build in insteon support of Vera. I have insteon mixed in with my z-wave.
The instant status issue on the z-wave side is due to a patent issue caused by Lutron. So it would require some sort of deal with Lutron to use it. Reason why not many manufactures have it and why I use Leviton devices where ever I can.