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If you are coming to Hollywood to see celebrities and experience the world presented in American films, you might be a bit disappointed. However, if you are coming for great weather, excellent people watching, top-notch shopping and tourist shops, than look no further!
The term "Hollywood" usually refers to two distinctly different things: 1) The culture and lifestyle of being a celebrity (not a physical place); and 2) a neighborhood in Los Angeles where almost no celebrities live, and which is mostly an area set up for tourism around movie making. While many who visit and live in the Los Angeles area report seeing celebrities on the streets and in the supermarkets, you are far more likely to run into one in Malibu or Beverly Hills than you are in Hollywood. However, that doesn't mean it can't be a fun location to spend the day.
The term "Hollywood" actually refers to four distinct areas, all with their own local flavor.
"Hollywood" generally refers to the area right around the Chinese Theatre (http://www.manntheatres.com/chinese) near Highland and Hollywood Avenues. This area, while it has pockets of nice neighborhoods at the base of the hills, mostly caters to tourists. Hollywood Avenue is crowded with T-Shirt shops selling souvenirs to locals and it also features the Walk of Fame along the sidewalks, where you can find your favorite celebrity's "star," along with (if you are lucky!) their hand and/or footprints in cement at the base of the theatre. There are often studio premieres at the Chinese Theatre, so if you see people crowding a roped-off sidewalk across from the theatre, you'll know what's about to happen. Hollywood can be fun for tourists, but the locals (and especially celebrities) tend to avoid it due to its dirty streets and lack of shopping that appeals to them. There are also some more dangerous neighborhoods in Hollywood, so it's best to stick to the heavily populated areas with shops than it is to wander down side streets. In general, sticking to the area West of Fountain Ave. is advised.
"West Hollywood" is its own incorporated city, and is around the area of Melrose Avenue and the Sunset Strip. These areas offer fun shopping and nightlife (respectively), and you'll see far more locals in this area. For a nice walking tour of cute houses, check out the Fairfax District, located in the blocks between Fairfax, La Brea, Melrose and Beverly. Walking there on a Saturday will likely reveal groups of Orthodox Jewish men, women and children walking to temple nearby.
"North Hollywood" is a rougher neighborhood, generally to be avoided. Two items of interest that are worth a visit in North Hollywood are Universal Studios and Hollywood Lake, great for a stroll around on a weekend. Other than that, you'll be much better off sticking to West Hollywood.
"The Hollywood Hills" are a residential area in the hills that separate the west side of LA from the San Fernando Valley. They can make for great walking tours of multimillion dollar houses, and you might find some celebrity homes up there (but you'll need a star map to know which ones are which).
Here is a link to more information about the famous movie making region of the USA.