From Sonic Retro
South Island is an island which featured prominently in the early Sonic games, especially in 8-bit outings. It is located somewhere in the Pacific.
South Island first appeared in Sonic the Hedgehog for the Mega Drive, and later appeared in Sonic the Hedgehog, Sonic the Hedgehog 2, and Sonic Chaos for the Game Gear and Master System. Its next appearance was in Sonic the Fighters, an arcade game. Its newest depiction to date was in Sonic Generations, where a 3D rendition of the Green Hill Zone is the first level.
Sonic the Hedgehog (16-bit)
In Sonic the Hedgehog, Sonic finds that the evil Doctor Robotnik built a base on the island and turned the local residents into robots to aid in his search for the legendary Chaos Emeralds. The heroic hedgehog collects the Emeralds first, stops Eggman and chases him off the island.
Sonic the Hedgehog (8-bit)
The story in the 8-bit Sonic the Hedgehog is the same as in the 16-bit one, and the games most likely depict the same adventure.
Sonic the Hedgehog 2 (8-bit)
In Sonic the Hedgehog 2, Eggman returns and kidnaps all the inhabitants, along with Miles "Tails" Prower, demanding a ransom of six Chaos Emeralds to return them. Sonic goes out to stop him once again, and succeeds.
In Sonic Chaos, Robotnik steals one of the Chaos Emeralds on South Island and as a result, the rest of the Emeralds become unbalanced and cause the island to slowly sink into the ocean. However, Sonic recovers all the Emeralds and saves the island.
Sonic the Fighters
In Sonic the Fighters, South Island is one of the battle arenas. It is the very first arena in story mode, and is where the player character faces Knuckles the Echidna. The arena is set on a small island plateau, in an area that looks mostly like the Green Hill Zone.
Sonic Adventure 2
In Sonic Adventure 2 and its GameCube remake, Sonic Adventure 2: Battle, Green Hill Zone was a secret stage that could be unlocked by obtaining all 180 Emblems. On the Stage Select screen, the icon for Green Hill could be found on a secluded island, presumably South Island.