I think that if he razes it and leaves thereafter, the Senate will just reappear. I suppose it depends upon how much time you occupy it, though.

The ideal, as Siris mentioned, would be if the AI Romans played as if they were one separate faction led by the Senate. If Rome were to be sacked, it would be great if the AI Romans dropped what they were doing and hurrried off to save the mother city.

Sadly, I have yet to see it.
As I tried to let on in the last thread, I have played as the Greeks (vh/m) and marched on Rome as soon as I secured my half of Sicily. I left a garrison in Rome and kept marching North with my main army. Not once did that garrison see a Roman faction attempt to liberate it. Granted, the Julii were occupied by myself and Gaul - but the Brutii had a free shot on me anytime they wished (the Scipii, once being beaten off Sicily, stayed in their capital).
Still, I was tremendously surprised. My plan was to use the scorched earth policy on the Roman cities I captured; capture, burn the buildings down that I could, leave a small garrison until revolt kicked me out or it was liberated, and them make a fighting retreat to my main army. I fully expected to see all of Rome fall on me in an attempt to save their Senate, but it never came.

I still think that the AI factions are all separate entities. I'm not so sure the AI Senate actively works with the AI Romans (and vice versa). I don't know if the Senate hands out the same missions to the AI as they do when we play one. I believe, rather, that the AI Romans are just scripted to do the same opening moves we might see.