Take a look at this picture:
It shows that if there is a fault with a device, current will flow from Live to Earth, hence you don't feel an electric shock.
However, I don't completely understand how much of a safety increase earthing a home appliance causes. From what I've read, "Earth" is a long metal rod driven quite deep into the soil to get a good connection. Most houses are concrete or wood.
From what I understand, if I touch a faulty appliance which doesn't have an Earth connection, the expected path of current is from Live -> through my body -> through a layer of wood or concrete -> into the soil. Surely if you need a long metal rod into the soil to get a good connection, the foundation of wood in your house cannot provide a current path.
I don't deny there is some added protection (perhaps if I decided to touch a faulty appliance while inside a bath, or outside on wet soil), but is not having an earth connection really unsafe?