real world. Willy obsesses about the past as his reality becomes more fragile.

In this particular part of the play, Biff has been away for a while and has finally come home. He and Happy are in their old room talking, and they can hear Willy talking to himself downstairs. Willy has been taken back to a happier times and in his memory, Biff is waxing the family car and they're talking. Willy says...

You gonna wash the engine, Biff?...Don't get your sweater dirty, Biff!...What a simonizing job! No kiddin', Biff, you got a date? Wonderful!

Happy is familiar with this behavior, but this is the first time Biff has heard it. While Hap shushes him, Biff becomes angry for his mother's sake. At one point, stage direction states "A look of pain crosses Biff's face." Biff says...

Doesn't he know Mom can hear that?...Mom's hearing that!...With her in the house. Brother!...That selfish, stupid...

While Biff is angry and protective of his mother's feelings, Hap seems mildly concerned, but more because Willy's behavior is embarrassing...

Isn't that terrible? Don't leave again, will you? You'll find a job here. You gotta stick around. I don't know what to do about him, it's getting embarrassing...Go to sleep, but talk to him in the morning, will you?

As the scene changes, Willy is back in Biff's high school days, continuing the conversation. The audience is given a flashback to happier days in the family's life, which will be contrasted sharply later in the play with the reality of how the dynamics of the family have drastically changed.

However, for this portion of the play, Willy is introduced as a man who is losing touch with those around him; his son Biff is angered by this behavior (though we may not yet be sure as to why); and, Happy—as we will discover as the play continues—is relatively shallow and more interested in himself than anyone else. Biff is criticized more by his father and mother, but he is the one who actually seems to care more for them than Hap.

Additional Sources:

http://www.enotes.com/death-of-a-salesman/biff-loman

http://www.enotes.com/death-of-a-salesman/other-characters

In the first act of the play, Biff and Happy overhear their father reminiscing about when they were teenagers. While Biff and Happy are awake in the upstairs bedroom, Willy begins to hallucinate and recalls a time when he returned from a sales trip to his enthusiastic teenage boys.

During Willy's flashback, he comments on Biff's wonderful simonizing job and gives the boys a punching bag as a gift. When Biff mentions that he "borrowed" a football from the locker room without the coach's permission, Willy congratulates Biff on his initiative instead of chastising him for stealing. Willy proceeds to tell his boys that he visited the Mayor of Providence, which astonishes both of them. Biff then promises that he will score a touchdown for his father in his next football game. After Bernard tells Biff that he should be studying for an upcoming exam, Willy dismisses Bernard as being an unpopular anemic.

Willy then emphasizes the importance of maintaining appearances and completely dismisses the importance of academic success and hard work. Willy's flashback then shifts to him breaking the difficult news to Linda that his sales trip was a complete failure before he hears the laughter of his mistress.

I'm not sure which incident you are referring to, so I'll start with the first.  Willy is thinking about Biff's Chevvy, the car Biff had when he was a teenager.  Hee remembers fondly that Biff took such good care of the car that the "dealer refused to believe that there was eighty thousand miles on it."  When the boys are in their bedrooms they can hear Willy exclaiming "What a simonizing job, heh!"  Willy is referring to the way Biff would polish the car. 

In this act Willy alternates between his admiration of Biff and his frustration with him.  But these lapses in which Willy retreats to his past are more often positive recollections of Biff, even though a few negative memories creep in.