ToList()-- does it create a new list?

ToList will always create a new list, which will not reflect any subsequent changes to the collection.

However, it will reflect changes to the objects themselves (Unless they're mutable structs).

In other words, if you replace an object in the original list with a different object, the ToList will still contain the first object.
However, if you modify one of the objects in the original list, the ToList will still contain the same (modified) object.

From the Reflector'd source:

public static List<TSource> ToList<TSource>(this IEnumerable<TSource> source)
{
    if (source == null)
    {
        throw Error.ArgumentNull("source");
    }
    return new List<TSource>(source);
}

So yes, your original list won't be updated (i.e. additions or removals) however the referenced objects will.

Yes, ToList will create a new list, but because in this case MyObject is a reference type then the new list will contain references to the same objects as the original list.

Updating the SimpleInt property of an object referenced in the new list will also affect the equivalent object in the original list.

(If MyObject was declared as a struct rather than a class then the new list would contain copies of the elements in the original list, and updating a property of an element in the new list would not affect the equivalent element in the original list.)