I've just started re-watching from series 1 which is being shown in England now again. Yay! I watched a bit of series 3 and enjoyed it. Enjoying it even more now I can see the characters develop... especially Raj!
I always thought it was set in Pasedena, however recent episodes have had an actress needing to get to Universal Studios in 45 minutes, and a train ride to San Fransisco that was to last around 11 hours... which sets it in Los Angeles. Plus I am sure they talk about going out to the bars of LA... so where did I get the idea it was set in Pasedena?