My personal theory for Earth:
In one of the blog or podcasts, I think RDM said they weren't ignoring that all the scientific evidence that says that humans evolved on Earth.
"' Life here began out there', these are the first words of the Sacred Scrolls!" was Adama's quote from the miniseries.
The exodus from Kobol was about 2000 years before the exodus from the colonies. The civilization of the colonies had an awful lot in common with modern Earth. Similar fashions, their cities had similar architecture, lots of things that make it seem like they came from us.
Not to mention that the religions of both the Colonials and Cylons seem to be strongly derived from Earth.
The fact that the original flags of the 12 colonies reflected how the constellations looked from Earth means that the founders of the 12 had to have at least been to Earth or their predecessors had.
It's also interesting that the scroll of Pythia describes their entire voyage apparently, meaning somebody from that group also had to make it back to the Colonies to relay the story.
I think that "what really happened" was that in the future relative to us, Earth was polluted and ruined, and mankind had developed interstellar travel, and found far from us a single habitable world. It recieved the name Kobol and mankind left Earth to settle a new world. Mankind entered a seeming golden age, massive changes in religion, some changes in culture, new developments in technology. However, strife among the Lords of Kobol meant that another exodus was on the way. Now, mankind had discovered 12 more worlds, each named after a constellation of the zodiac, and entered a new era, but a final group decided to go and reclaim Earth, halfway across the Galaxy.
Earth may have been terraformed back to shape, and now millennia in the future, it's a peaceful and advanced world, not accustomed to war and knowing only distant tales of cousins across the galaxy. They know nothing of the Cylons, and they are most certainly not prepared for war.
Yes, for Galactica's voyage to mean something, Earth won't be a superpower of the stars that can make the Cylons tremble, but it won't be an uninhabited paradise.
A "Galactica 1980" approach of finding modern-day Earth seems lame and cheesy, and unlike the original series New Galactica isn't a "Planet of the Week" show in the Star Trek mold where every week they find another Earthlike world with humans on it (like a transparent Cold War analogy, or a Wild West planet, or a casino planet. . .). Habitable planets are rare and special in this series, alien races are unknown, and when they find Earth, I doubt they'll come into orbit at the year 2010 AD or thereabouts (more like 5000 AD I think myself).