Tales from the Script is a documentary about screen writing that takes a hard look at the travails and triumphs of the rather unsung role of the screenwriter in Hollywood. Fickle certainly applies to the way this movie depicts Hollywood, though not exactly false. The strangeness of "the Business" however is on full display.
Akannan gives some excellent examples in the above post. Here are a few others.
- Day of the Locust. One of my favorite flicks of the 'Seventies (1975). Set in Hollywood of the 1930s, Donald Sutherland stars as--believe it or not!--Homer Simpson, an accountant; Karen Black as an aspiring actress; and William Atherton as a young artist hired by a major studio. Sometimes epic in scope, it details the hopes and failures that plague many Hollywood hopefuls. Nominated for two Oscars.
- Barton Fink. This Coen Brothers satire, released in 1991, was a critical success, but it failed miserably at the box office. John Turturro plays a New York City playwright who attempts to make the transition to film screenwriter. His character is loosely based on other writers (particularly William Faulkner and Clifford Odets) who headed west with similar goals.
- The Big Picture. Kevin Bacon stars in this 1989 film as a promising young director who is handed a big-budget film, but quickly discovers that Tinseltown is filled with dishonesty and false promises.
I am moving this to the "Cinema" category because I think you will find more examples of films that satire Hollywood that anything else. One good example of a film that represents the satiric take towards Hollywood would be Robert Altman's, The Player. I just think that it's a great film about how phony Hollywood is and represents great filmmaking about the making of films. Another film that shows the false element of Hollywood really well is Woody Allen's The Purple Rose of Cairo. It is not a satire about Hollywood, itself, but does a wonderful job in exploring how the movies are not real and yet are viewed as such by so many "out there, in the dark." A film that explores the phoniness of Hollywood, but is not really a satire, would be Sunset Blvd. Billy Wilder's work about faded screen star Norma Desmond is a classic about Hollywood, in general. While it is not a film, the television serial, "Entourage" is a wonderful look at the Hollywood machine. The characters and their interaction with Hollywood life is really vivid and, frankly, amazing. Finally, a film that is a satire about many aspects of being in the world, in which Hollywood is a part of it, would be Spike Jonze's Adaptation, written by Charlie Kaufman.