You wanna know why?
They were live in Earth 'cause I've seen 2 episodes that proof enough , first in "Unmoving Pictures" Eradicu's minions are pretending to be Hollywood people and second in "Upstanding Yuck" when Yuck blows the town the explotion shown from out of Earth,,
but I still don't get it why in "Yin Yang You" they don't recognize Earth or Hollywood?

episodes

Nope. See the episode Yin Yang You. And xsiVePux, i unmoving pictures they never really mention them selfs as hollywood people, and plus were they live must be a second demention of earth.

If anyone's ever watched Sonic X, in one of the episodes Eggman states that both the world they came from and Earth were situated in exactly the same place in time and space but they were in different dimensions. They were all Chaos Controlled (teleported) to Earth during an incident that happened in Eggman's base with the Chaos Emeralds which is what transported them to Earth. In the YYY episode Yin Yang You, Carl creates a portal that transported Lina, Yin, Yang and himself into Earth which leads me to believe that A. the portal that Carl created is similar to Chaos Control in Sonic X and B. they do live on our planet, but in a different dimension. Boy my imagination is amazing.