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Well, as you know everything has an electrical resistance (except superconductors). Also you know that an ideal ground will sink in infinite amount of current without changing its relative potential. In reality due to resistance of the household wiring, the imperfection of the ground itself and its conductivity, the ground is actually not exactly at 0V potential. This means that a small amount of common current will flow to every device in the same grid. The 250mOhm resistor represents the combined resistance of all the wires in a single household, although the resistance distribution is much more complex, adding up for every appliance. Now let's place a 220V/100W light bulb, as you can find in any household in the outlet. You'll see that (at the blue line), due to the limited voltage drop to ground a small voltage developes on the ground rail. Here it is 168mV but that value will widely vary from load to load. The worst ground loop voltage is from a motor. It's very harmonic rich and contains all sorts of noise. Now if you are using the outlet for just light bulbs and such, the ground loop, shouldn't pose any problems, nor an electrocution risk. But if you add a more complex, noise sensitive circuit like an amplifier (circuit on the right), a sufficient hum will develop at the output (green line). Even worse if the hum finds its way to the input it may get amplified severalfold, leading to oscillations. And that is pretty undesirable. You see ground loops in analog TV, when horizontal sweeping lines develop on the screen. The yellow line represents perfect ground without any ground loops. The only sure way of eliminating ground loops completely is to add an isolation transformer, to separate the mains ground from the circuit ground. The ,,circuit ground'' is also called chassis ground or signal ground and it's usually disconnected from earth ground. So to sum things up, ground loops lead to small amounts of current flowing through the common conductor, which leads to many undesirable effects. To negate it an isolation transformer is required. An isolation transformer has one more purpose. To enable you to choose a fixed point for your ground, that is independent of the ground point of the mains. If you have any further questions refer to https://en.m.wikipedia.org/wiki/Ground_loop_(electricity) or ask away. I'll be happy to further disambiguate things
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